Peru has upsized a 12-year local currency bond after deciding to accept more cash tenders on its latest liability management trade, a banker on the deal told IFR on Thursday.
The country will now issue approximately S1.6bn (US $474.2m) of new 6.35% 12-years, increasing the amount from 806.826m, after pricing the deal on Wednesday at 99.851 to yield 6.375% on the back of a S11bn-plus order book.
The bond sale is part of an exchange and tender for roughly US $13bn-equivalent of securities, as Peru looks to reduce its dollar debt and please the rating agencies.
Holders are being offered the chance to sell back their existing bonds for cash or switch into the new security.
The borrower is targeting sol-denominated sovereign bonds maturing in 2017, 2020, 2023 and 2026, as well as dollar bonds maturing in 2019, 2025, 2033 and 2037.
Purchase prices on the tender were set at 104.50, 116.50, 101.20, 118.15, 115.30, 139.15, 161.10 and 140.30.
Any money raised from the new 12-year will fund the tender, making it a "cash-neutral" transaction, the banker said.
The size of the new security will grow further once the exchange portion of the transaction is completed.
BBVA, Bank of America Merrill Lynch and HSBC are leads on the transaction. Peru's local currency ratings are A3/A-/A-.