Peru starts optional tender, exchange for four series of bonds

By Jennifer Chiou

New York, April 9 - Peru announced that it is inviting holders of the following series of bonds to tender any and all of their holdings or participate in an exchange offer for 8¾% dollar-denominated global bonds due 2033:

• $401,562,000 of 9 1/8% global bonds due 2012;

• €650 million of 7½% global bonds due 2014;

• $750 million of 9 7/8% global bonds due 2015; and

• $1,332,895,000 of 8 3/8% global bonds due 2016.

The 8¾% exchange bonds have a current outstanding amount of $984,636,000, and the to-be-exchanged bonds will form a single series with the existing securities. There is no cap to the amount of new 8¾% bonds that can be issued.

Peru, however, said it will only pay up to $500 million in cash in the tender.

If a tendering holder's notes are subject to proration due to the tender cap, that holder may opt to exchange the amount of eligible bonds not accepted for purchase as long as it meets the minimum threshold condition.

The payout for the 9 1/8% bonds will be calculated using the 1% Treasury due March 2012 with a spread of 10 basis points while the payout for the 7½% global bonds will be set using the euro swap rate and a 102 bps spread.

The 9 7/8% global bonds' payout will be set using the 2½% Treasury due March 2015 and a spread of 77 bps, and the payout for the 8 3/8% global bonds will be set using the 2 5/8% Treasury due April 2016.

The offers will end at 5 p.m. ET on April 14.

The dealer managers are Barclays Capital Inc. (800 438-3242 or call collect 212 528-7581) and HSBC Securities (USA) Inc. (888 HSBC-4LM or 212 525-5552).

The information agent is Bondholder Communications Group (212 809-2663 or 44 20 7382-4580).

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