Peru begins separate tender offers for dollar, sol-denominated bonds

By Sarah Lizee

Olympia, Wash., Nov. 21 – The Republic of Peru announced the launch of two separate tender offers on Thursday, including a stand-alone tender for its existing 7.84% bonds due 2020 and a switch tender for two series of U.S. dollar-denominated notes and two series of sol-denominated notes.

Stand-alone tender

The republic is offering to cash a capped amount of the S/. 231,125,000 of 7.84% bonds due 2020, including in the form of global depositary notes previously issued by Citibank, NA as depositary.

Peru is not the issuer of any GDNs and is only offering to purchase the old bonds underlying any GDNs.

If the aggregate total purchase price exceeds the maximum purchase amount, the purchase amount may be subject to proration.

Per S/. 1,000 principal amount of the old bonds validly tendered and accepted for purchase, holders will receive S/. 1,041.99 plus accrued interest.

Holders who tender GDNs will receive S/. 1,040.99 per S/. 1,000 GDN tendered in the offer.

Holders whose old bonds are validly tendered and accepted for purchase will be paid in soles, and holders of GDNs whose old bonds are validly tendered and accepted for purchase will be paid the equivalent amount of the purchase price in U.S. dollars.

Settlement is scheduled for Dec. 4.

The offer will expire at 5 p.m. ET on Nov. 27.

Switch tender

Peru is also offering to purchase for cash a capped amount of its outstanding $1,646,481,000 of 7.35% global old bonds due 2025, $1,061,614,000 of 4 1/8% old global old bonds due 2027, S/. 1,776,910,000 5.2% bonds due 2023 and S/. 11,544,133,000 of 5.7% bonds due 2024, including in the form of GDNs previously issued by Citibank.

The republic will not accept tenders of the 5.7% bonds due 2024 in any amount that would leave less than 50% of the principal amount outstanding.

Subject to the maximum purchase amount and proration, Peru expects to accept preferred tender orders to the extent validly tendered at or prior to the non-preferred expiration time, before any non-preferred tender orders are accepted in the offer.

The purchase price per S/. 1,000 or $1,000 of bonds tendered will be as follows S/. 1,100.63 for the 5.2% bonds, S/. 1,112.63 for the 5.7% bonds, $1,264.59 for the 7.35% bonds and $1,119.64 for the 4 1/8% bonds.

However, holders who tender sol-denominated non-preferred GDNs will receive, per S/. 1,000 principal amount, S/. 1,099.63 for the 5.2% bonds and S/. 1,111.63 for the 5.7% bonds.

Holders will also receive accrued interest.

The offer was set expire at noon ET on Nov. 21 for non-preferred tenders and 4 p.m. ET for preferred tenders.

The tender offers are subject to some conditions, including the pricing and closing of a new issuance of Peru's sol-denominated bonds.

The offers are not conditioned upon any minimum participation of old bonds.

BofA Securities, Inc. (646 855-8988 or 888 292-0070), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), HSBC Securities (USA) Inc. (888 HSBC-4LM or 212 525-5552) and J.P. Morgan Securities LLC (866 846-2874 or 212 834-7279) will serve as the dealer managers for both offers.

Global Bondholder Services Corp. (212 430-3774 or 866 470-3800) is acting as the information agent and tender agent.

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