The Republic Of Peru Announces Offer To Purchase Sovereign Bonds

LIMA, Peru, Nov. 29, 2018 – — The Republic of Peru (“Peru“) announced today an offer (the “Offer”) to purchase for cash (i) sovereign bonds or bonos soberanos (the “Bonos Soberanos“), including Bonos Soberanos in the form of Global Depositary Notes (“GDNs”) previously issued by Citibank N.A. and (ii) global bonds (the “Global Bonds”), in each case as set forth in the tables below (the Bonos Soberanos, GDNs and Global Bonds, collectively, the “Bonds”), in an aggregate principal amount to be determined by Peru, in its sole discretion (the “Maximum Purchase Amount”). J.P. Morgan Securities plc (“J.P. Morgan”), Morgan Stanley & Co. LLC (“Morgan Stanley”), Santander Investment Securities Inc., Scotiabank Peru S.A.A. (“Scotiabank Peru”), and Scotia Capital (USA) Inc., will serve as the dealer managers for the Offer and D.F. King & Co., Inc. is acting as the information agent for the Offer. Scotiabank Peru is acting as billing and delivery bank for the Bonos Soberanos, J.P. Morgan is acting as billing and delivery bank for the GDNs, and Morgan Stanley is acting as billing and delivery bank for the Global Bonds (in such capacities, collectively, the “Billing and Delivery Banks”).

The Offer is made subject to the terms and conditions set forth in the offer to purchase dated November 29, 2018 (the “Offer Document”), including the pricing and closing of a new issuance of Peru’s Bonos Soberanos due 2029 (the “New Bonds”) in an amount and on terms and conditions acceptable to Peru (the “New Bond Offering”).  Peru expects to announce the Maximum Purchase Amount including the Aggregate Purchase Amount of Tenders (as such terms are defined in the Offer Document) of each series of the Bonds that are accepted in the Offer and whether such series will be subject to any proration at 9:00 a.m., New York City time, on Friday, November 30, 2018. The Offer is not conditioned on any minimum participation by any series of Bonds.  The aggregate principal amount of eligible Global Bonds and Bonos Soberanos (including Bonos Soberanos in the form of GDNs) outstanding as of Wednesday, November 28, 2018 was U.S.$149,214,000 and S/6,045,713,000, respectively.

This announcement does not constitute an offer to sell or the solicitation of an order to buy the New Bonds.  The New Bonds, including New Bonds issued in the form of GDNs, will be offered only to qualified institutional buyers in the United States in reliance on Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act (collectively, “Eligible Holders”).

The price paid per U.S.$1,000 or S/1,000, as applicable, principal amount of each series of Bonds tendered by holders and accepted pursuant to the Offer (the “Purchase Price”) is set forth in the tables below.  Holders will also receive an amount in cash equal to any accrued and unpaid interest on their Bonds tendered and accepted for purchase (“Accrued Interest”), up to (but excluding) Thursday, December 6, 2018 (the “Settlement Date”).  Payment will be made on the Settlement Date in U.S. Dollars or Soles, as applicable, as further described herein.




 

Purchase Price (2)

Bonds


Outstanding Aggregate

Principal Amount of Bonds

as of November 28, 2018
(1)


Preferred


Non-Preferred

7.84% Bonos Soberanos due 2020


S/4,400,890,000


S/1,081.501


(same as Preferred)

7.84% GDNs due 2020 (4)



S/1,081.50


S/1,080.50 (3)

6.0% Bonos Soberanos due 2029


S/1,644,823,000


S/1,025.80


(same as Preferred)

6.0% GDNs due 2029 (4)



S/1,025.80


S/1,024.80 (3)



(1)   

These amounts may include Bonds held by institutions and companies controlled by the Peruvian Government that have not been cancelled.

(2)    

Per S/1,000 principal amount of Bonos Soberanos validly tendered and accepted for purchase.  Holders whose Bonds are validly tendered and accepted for purchase pursuant to the Offer will also receive Accrued Interest (as defined below).  Holders of Bonos Soberanos whose Bonds are validly tendered and accepted for purchase pursuant to the Offer will be paid in Soles and holders of GDNs whose Bonds are validly tendered and accepted for purchase pursuant to the Offer will be paid in U.S. dollars.

(3)    

Reflects fees associated with the cancellation of the GDNs payable to Citibank N.A., as the depositary.

(4)   

Issued by Citibank N.A., as the depositary, which, if accepted for purchase pursuant to the Offer, will be settled by J.P. Morgan on behalf of Peru and payable in U.S. dollars as described below.





Bonds


Outstanding Aggregate

Principal Amount of Bonds as of

November 28, 2018
(1)


Purchase Price

7.125% Global Bonds due 2019(2)


                     U.S.$149,214,000


                     U.S.$ 1,020.50






(1) 

These amounts may include Bonds held by institutions and companies controlled by the Peruvian Government that have not been cancelled.

(2)  

Per U.S.$1,000 principal amount of Global Bonds validly tendered and accepted for purchase.  Holders whose Bonds are validly tendered and accepted for purchase pursuant to the Offer will also receive Accrued Interest (as defined below).  Holders of Global Bonds whose Bonds are validly tendered and accepted for purchase pursuant to the Offer will be paid in U.S. dollars.

Each of (i) the Purchase Price of the Bonos Soberanos in the form of GDNs and (ii) the Indication of Interest Amount of Preferred Tenders for Bonos Soberanos in the form of GDNs will be calculated by converting Soles amounts to U.S. dollars, at the rate of S/3.377 to U.S.$1.00, which was the average between the bid price (compra) and the offer price (venta) of the exchange rate published by the Superintendencia de Banca, Seguros y AFP on its website (http://www.sbs.gob.pe) on November 28, 2018, the day before the date of this Offer Document, as adjusted for three decimals.

Holders of the Global Bonds may only submit tenders for cash.

Only Eligible Holders of Bonos Soberanos subject to the Offer, may submit Preferred Tenders (as defined below) for New Bonds. Holders of GDNs subject to the Offer may only submit Preferred Tenders for New Bonds in the form of GDNs, issued by Citibank N.A., as the depositary.

Tenders may be subject to proration.  Tenders made by holders who submit an Indication of Interest (as defined in the Offer Document) to subscribe for New Bonds in the Offer thereof will have preference.

THE OFFER WILL COMMENCE AT OR AROUND 8:00 A.M., NEW YORK CITY TIME, ON THURSDAY, NOVEMBER 29, 2018.  UNLESS EXTENDED OR EARLIER TERMINATED, THIS OFFER EXPIRES AT 11:00 A.M., NEW YORK CITY TIME, ON THURSDAY, NOVEMBER 29, 2018 FOR NON-PREFERRED TENDERS (AS DEFINED IN THE OFFER DOCUMENT), AT 1:00 P.M., NEW YORK CITY TIME, ON THURSDAY, NOVEMBER 29, 2018 FOR PREFERRED TENDERS, AND AT 11:00 A.M., NEW YORK CITY TIME, ON THURSDAY, NOVEMBER 29, 2018 FOR GLOBAL BONDS CASH TENDERS (AS DEFINED IN THE OFFER DOCUMENT).

If you hold Bonos Soberanos, you may tender such Bonds through Scotiabank Peru, and if you do not have an account with Scotiabank Peru, through another dealer manager. If you hold GDNs, you may tender such Bonds through J.P. Morgan, and if you do not have an account with J.P. Morgan, through another dealer manager. If you hold Global Bonds, you may tender such Bonds through Morgan Stanley, and if you do not have an account with Morgan Stanley, through another dealer manager.  You will NOT be able to submit tenders through Euroclear, Clearstream, the Depository Trust Company (“DTC”) systems or CAVALI S.A. ICLV (“CAVALI”).  The Billing and Delivery Banks will consolidate all tenders and accept Bonds for purchase on behalf of Peru.  Peru expects to instruct the Billing and Delivery Banks to apply a portion of the proceeds of the New Bond Offering to acquire any Bonds validly tendered and accepted in the Offer upon the closing of the New Bond Offering.  Bonds accepted for purchase will be settled on a delivery versus-payment basis with the Billing and Delivery Banks on the Settlement Date, in accordance with customary brokerage practices for corporate fixed income securities.

If you hold Bonos Soberanos registered with CAVALI, you will not be able to tender the Bonds through CAVALI.  You must submit tenders and deliver the Bonos Soberanos, in accordance with customary brokerage practices in Peru, to Scotiabank Peru.  If you hold Global Bonds or GDNs through DTC, they must be delivered for settlement to J.P. Morgan in the case of the GDNs or Morgan Stanley in the case of Global Bonds no later than 3:00 p.m., New York City time, on the Settlement Date.  If you hold Global Bonds or GDNs through Euroclear or Clearstream, the latest process you can use to deliver your GDNs to J.P. Morgan or Global Bonds to Morgan Stanley is the overnight process, one day prior to the Settlement Date; you MAY NOT use the optional daylight process.  This Offer will not be eligible for the DTC Automated Tender Offer Program. 

Failure to deliver Bonds on time may result, in Peru’s sole discretion, in any of the following (i) cancellation of such tenders and in such holders becoming liable for any damages resulting from that failure, and/or (ii) delivery of a buy-in notice for the purchase of such Bonds, executed in accordance with customary brokerage practices for corporate fixed income securities, and/or (iii) in the case of Preferred Tenders, (x) cancellation of such tenders and (y) in such holders remaining obligated to purchase such allocations of New Bonds in respect of the related Indications of Interest.

               

The Billing and Delivering Banks will consolidate all tenders and accept Bonds for purchase on behalf of Peru.  Peru expects to apply a portion of the proceeds of the New Bond Offering to instruct the Billing and Delivery Banks to acquire any Bonds tendered and accepted in the Offer upon the closing of the New Bond Offering.  Bonds accepted for purchase will be settled on a delivery versus-payment basis with the Billing and Delivering Banks on the Settlement Date, in accordance with customary brokerage practices for corporate fixed income securities.

 

Holders of the Bonds will not have withdrawal rights with respect to the Offer.

 

The Offer is subject to Peru’s right, at its sole discretion and subject to applicable laws to extend, terminate, withdraw, or amend the Offer at any time. Each of Peru, the Billing and Delivering Banks and the dealer managers reserve the rights, in the sole discretion of each of them, to not accept tenders for any reason.

 

To request offering materials, please contact the Information Agent:


 

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Attention:  Peter Aymar

e-mail:  peru@dfking.com

 

In the United States:

Banks and Brokers Call:  (888) 626-0988

All Others Call:  (212) 269-5550

website:  www.dfking.com/republicofperu

 

The dealer managers for the Offer are:








J.P. Morgan Securities plc c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

 


Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036

 


Santander Investment Securities Inc.

45 East 53rd Street, 5th Floor New York, New York 10022

Scotiabank Peru S.A.A.

Av. Dionisio Derteano No. 102

San Isidro, Lima 27 Peru

Scotia Capital (USA) Inc.

250 Vesey Street

New York, NY 10281








Attention:  Liability Management

In the United States (toll free):

  +1 866-846-2874

Outside the United States (collect):

  +1 212-834-7279


Attention:  Liability Management

In the United States (toll free):

 +1 800-624-1808

Outside the United States (collect): 

+1 212-761-1057


Attention:  Liability Management Group

In the United States (toll free):

+1 855-404-3636

Outside the United States (collect): 

+ 1 212-940-1442

Attention:  Debt Capital Markets Peru

United States or Outside the United States (collect):

 +511 211-6040, ext. 18151 or 18153

+511 207-2630

Attention:  Debt Capital Markets

In the United States (toll free):

 +1 800- 372-3930

Outside the United States (collect): 

+1 212-225-5559

The Billing and Delivery Banks for the Offer are:




For Bonos Soberanos
Scotiabank Peru S.A.A.
Av. Dionisio Derteano No. 102
San Isidro, Lima 27
Peru

For GDNs
J.P. Morgan Securities plc c/o

J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

United States

For Global Bonds

Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036

United States

Disclaimer

The Offer Document is not for release, publication or distribution to any person located or resident in any jurisdiction where it is unlawful to distribute the Offer Document. Persons into whose possession the Offer Document comes are required by Peru, the Dealer Managers and the Information Agent to inform themselves about, and to observe, any such restrictions.

This announcement is neither an offer to purchase nor the solicitation of an offer to sell any of the securities described herein, nor shall there be any offer or sale of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Offer is made solely pursuant to the Offer Document dated the date hereof.

This announcement has been prepared on the basis that the Bonds are not being offered to the public within the meaning of Directive 2003/71/EC (as amended, the “Prospectus Directive”) and the Offer is not subject to the obligation to publish a prospectus under the Prospectus Directive.

This announcement is for distribution only to persons who (i) have professional experience in matters relating to investments falling within the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”)), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Order, (iii) are persons falling within Article 43 of the Order, (iv) are outside the United Kingdom, or (v) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”).  This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.

This announcement must be read in conjunction with the Offer Document. This announcement and the Offer Document contain important information which should be read carefully before any decision is made with respect to the Offer. If any Bond holder is in any doubt as to the action it should take, it is recommended that such holder seek its own financial and legal advice, including as to any tax consequences, immediately from its stockbroker, bank manager, attorney, accountant or other independent financial or legal adviser. None of Peru, the Dealer Managers or the Information Agent makes any recommendation as to whether Bond holders should tender Bonds in the Offer or participate in the Offer.

This announcement contains forward-looking statements and information that is necessarily subject to risks, uncertainties and assumptions. No assurance can be given that the transactions described herein will be consummated or as to the terms of any such transactions. Peru assumes no obligation to update or correct the information contained in this announcement.

SOURCE The Republic of Peru

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