Peru has reopened its global dollar bonds due in 2025 to repay a debt owed to its Paris Club creditors, an informal group of financial officials from 19 of the world’s richest countries, reported Peru’s Finance Ministry on Monday.
The bonds – expected to yield 7 percent, or $1 billion – will be used to repay a bilateral debt owed to the Paris Club, and replenish Peru’s treasury to make additional foreign debt payments. The Andean country plans to pay put $850 million to France and Italy – two prominent Paris Club members.
Peru has fully repaid Paris Club debts contracted in 1968, 1969, 1978, 1983 and 1984. Additional treatments contracted in 1991, 1993 and 1996 are still active, and are currently being repaid under “Houston terms,” a pre-defined category used for highly-indebted lower-middle-income countries.
In 2008, Peru’s external debt spiked to roughly $37,500 million. The Andean country has so far been excluded from any international debt relief agreements, and allocates more than 20 percent of its central government budget to service its debts.
