Rubio Leguia Normand advised a Citigroup Global Markets Inc., HSBC Securities (USA) Inc., JP Morgan Securities LLC and Santander Investment Securities Inc., as Initial Purchasers in the issuance of sovereign sustainable bonds by the Republic of Peru for up to PEN 9,185,000,000.00 (approximately US$ 2.5 billion) maturing in 2033, and as well as in the exchange and cash tender offer regarding existing sovereign bonds for a combined sum of US$ 6 billion, approximately.
A. Regarding the issuance of sovereign bonds.
This issuance has a significant importance since it marks Peru´s first issuance of a sovereign sustainable bond in local currency, and it represents the first sovereign bond issuance since 2019. Likewise, it currently stands as the largest local currency bond issuance in Latin America for 2023.
The transaction had a successful closing on May 31, 2023, and involved the participation on other law firms, such as Shearman & Sterling, Paul Hastings, Patterson Belknap Webb & Tyler and Hernández & Cía. Abogados.
B. Regarding the exchange and cash tender offer of existing sovereign bonds.
The exchange and cash tender offer for sovereign PEN denominated bonds was carried out regarding several existing bonds and GDNs, maturing between 2023 up to 2028. In total, up to PEN 7,098,979,000 (US$ 1.9 billion, approximately) of sovereign bonds and GDNs were exchanged and up to PEN 9,412,456,000 (US$ 2.5 billion, approximately) of existing sovereign bonds and GDNs were repurchased by the Republic through the cash tender offer.
The exchange of sovereign dollar denominated bonds was carried out regarding several existing Global Bonds maturing between 2025 up to 2031. In total up to US$ 1,628,341,000 dollar denominated sovereign bonds were exchanged.
The exchange and cash tender offer are especially significant as it has been the largest debt administration operation in Peruvian history. Also, it allows the Republic to consolidate its existing debt arising from prior issued sovereign bonds, in a single sovereign issuance maturing in 2023, which was carried out alongside the issuance of the sovereign sustainable bonds as described above.
Settlement of the transaction took place on June 12, 2023, and involved the participation of other law firms, such as Shearman & Sterling, Paul Hastings, Patterson Belknap Webb & Tyler and Hernández & Cía. Abogados.
“This issuance is of special importance as it contributes to the development of sustainable public spending in Peru, since the funds obtained from investors will be used for specific green and/or social purposes under international classification standards for issuances of this nature. Likewise, we are proud that our firm participated in this transaction as it has been confirmed to be the largest local currency issuance as of this year in Latin America and marks the return of Peru to the international capital markets since 2019.
Likewise, the exchange and cash tender offer was specially challenging as it involved several existing issuances of the Republic of Peru and showed once more investor confidence in our country, as the offer obtained a high percentage of acceptance regarding the exchange of existing bonds for new bonds maturing in 2023”.
Rubio Leguía Normand Team.