DEAL: Petroperú's $2 billion international bond

Author: John Crabb | Published: 11 Jul 2017

Petroleos del Perú’s (Petroperú) $2 billion bond is the first international issuance by a non-financial state-owned Peruvian company, and the largest corporate offering in the country’s history. It will be used to finance the modernisation of the Talara Refinery near Lima.

The notes, which were issued in two tranches - $1 billion worth of 4.75% 15-year notes and $1 billion of 5.625% 30-year notes - were not guaranteed by the government, despite the issuer being a state-owned company.

"State-owned entities often have or need the benefits of a government guarantee," said Clifford Chance US partner Alejandro Camacho, who acted as New York counsel to the issuer. "But in this case it wasn't necessary and it ended up being an investment grade credit."

Petroperú's Talara project has been in the pipeline for nearly 10 years The state-owned organisation is rated BBB-/BBB+. According to a Fitch report, without government ownership...