Bloomberg News

Bond Yields Rise Most in Four Months on Issue Bets: Lima Mover

February 01, 2012

Jan. 24 (Bloomberg) -- Peruvian dollar bonds fell, pushing up yields the most in four months, as investors speculated the Andean country may sell bonds overseas for the first time in more than a year.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due March 2037 rose nine basis points, or 0.09 percentage point, to 4.97 percent at 4:45 p.m. in Lima, the biggest increase since Sept. 22. The bond’s price fell 1.53 cents to 122.6 cents per dollar.

Investors are betting Peru’s government will issue 10-year, dollar-denominated bonds after Mexico and Colombia tapped overseas markets this month, said Diego Alvarez, a trader at Banco Internacional del Peru in Lima. Peruvian Finance Minister Miguel Castilla said Jan. 11 that the government is in talks with investment banks about a local or international bond sale.

“Colombia and Mexico have made similar moves, so it looks like that only leaves Peru,” Alvarez said. “Peruvian debt is an asset that’s in short supply” and a new issue would be snapped up by investors, he said.

Colombia sold $1.5 billion of bonds due 2041 on Jan. 10 to yield 4.96 percent in its first overseas offering since July. Mexico issued $2 billion of 10-year bonds to yield 3.706 percent while Brazil sold $750 million more of its 4.875 percent notes due 2021 to yield 3.449 percent, according to data compiled by Bloomberg.

Peru last sold debt overseas in November 2010, when it issued a record $2.5 billion in a mix of sol- and dollar- denominated bonds.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 fell one basis point to 5.73 percent, according to prices compiled by Bloomberg.

The sol was unchanged at 2.6920 per U.S. dollar at the close of trading, according to Deutsche Bank AG’s local unit.

--With assistance by Ben Bain in Mexico City. Editor: Brendan Walsh, James Attwood.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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