Fitch gives Peru bonds BB

Fitch Ratings said it expects to assign a long-term foreign currency rating of BB to the Republic of Peru's upcoming $750 million 20-year bond issue.

The outlook is stable.

This issuance is part of the government's plan to finance a prepayment of $1.55 billion in Paris Club debt as well as provide pre-financing for a portion of 2006 public financing needs, Fitch said.

Fitch said it upgraded Peru's long-term foreign currency rating to BB from BB- in November 2004, reflecting the passage of pension reform and robust macroeconomic and fiscal performance.

The agency said the general government deficit, which has declined from 2.1% of GDP in 2002 to 1.2% in 2004, is likely to fall to 1.0% of GDP this year.

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