Old but still interesting:
Peru Bonds Rally After Moody’s Upgrades Credit Rating
By John Quigley Jul 3, 2014 3:07 PM ET
Peruvian bonds rose the most in the Americas after Moody’s Investors Service raised the nation’s credit rating by two levels, citing falling debt and reduced dependence on metal exports.
The price of the government’s notes due 2025 jumped 0.93 cent to 132.68 cents per dollar at 2:02 p.m. in Lima, according to data compiled by Bloomberg. The yield fell nine basis points, or 0.09 percentage point, to 3.71 percent.
Peru’s rating was increased to A3, the seventh-highest investment grade and in line with Mexico, while three steps below Chile. Moody’s said yesterday the reason for the upgrade was the improvement in the government’s balance sheet as well as expectations for faster growth and the impact of initiatives to bolster competitiveness.
The two-step rating increase “was 100 percent unexpected” and will probably bolster overseas demand for Peru’s debt, Walther Benavides, head of fixed-income trading at BBVA Banco Continental in Lima, said an e-mailed response to questions.
The cost to insure Peru’s debt against default for five years with credit swaps dropped three basis points, or 0.03 percentage point, to 81 basis points, according to data compiled by Bloomberg. The sol rose 0.5 percent to 2.777 per U.S. dollar.
President Ollanta Humala on June 11 announced legislation to forgive some back taxes, accelerate public works and boost investment in mining, hydrocarbons and telecommunications.
