Peru's huge step to attract institutional investors and create a sustainable domestic capital market
It’s always gratifying when something you’ve worked for over a long period comes to fruition. That sums up what recently happened in Peru.
In July, the country issued its first Euroclearable local currency-denominated bond. Around 70% of the 3 billion-plus USD issue (denominated in Nuevo sol) was taken up by non-resident investors.
This is a major part in its effort to build a sustainable local financial structures – an important objective for countries looking to reshape their economic landscape.
Euroclearability made it easier than ever before for international investors to buy Peruvian debt, and they appear to have grabbed the chance with both hands.
At Peru’s Ministry of Economy and Finance, José Andrés Olivares, the director of financial markets management, called the issue "a real milestone". He told journalists: "This allowed us to deepen and add liquidity to the Nuevo sol-denominated public bond market and attract more than 110 different accounts."
Indeed, at this time, Peru was still exposed to foreign currency exchange and many international investors could not access Peru's capital markets directly.
We were happy to be asked to work with Peru's Ministry of Finance and Economy to make the market Euroclearable. A key part of this was helping to identify some key changes to the legal and regulatory framework.