Peru to focus on local market through 2019: debt head

The government of Peru does not anticipate additional dollar bond sales this year, but will look to increase local currency issuance, the country's debt head said on Friday.

By Miluska Berrospi

NEW YORK, June 14 (IFR) - The government of Peru does not anticipate additional dollar bond sales this year, but will look to increase local currency issuance, the country's debt head said on Friday.

Peru's head of capital markets and public debt Jose Olivares Canchari talked to IFR fresh off a local currency and US dollar bond sale that saw demand swell to over US$10bn during the course of bookbuilding on Thursday.

The deal, which was part of a tender to extend maturities, resulted in the issuance of about of S1.8bn (US$1.75bn) of 4.5% 2034s and another US$750m of 2.84% 2030s.

While that was the country's first dollar deal since 2015, Olivares thinks it unlikely that more bonds in this currency will come this year.

"We cannot abandon the dollar market," he said, highlighting the importance of the market for the country's credit profile.

"But the probability (of issuing in dollars this year) is very low."

The country, however, is looking to bolster its local debt issuance over the medium term as the government seeks to deepen its local markets, where it hopes to raise an additional US$2bn-US$3bn this year.

In the past few months, two Peruvian corporates issued debt in local currencies to foreign accounts.

Consumer goods company Alicorp issued S1.64bn eight-year at a 6.875% yield in April, while Telefonica del Peru priced S1.7bn 2027 with a coupon of 7.375% that month as well.

"I'm very sure the local market will continue developing and it will be very positive not only for the country, but for local corporates," said Olivares.

(Reporting by Miluska Berrospi; Editing by Paul Kilby)

((Miluska.Berrospi@thomsonreuters.com;))

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