SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Peru’s currency and bonds fell after leftist presidential candidate Pedro Castillo is reported as the clear favorite in an opinion poll ahead of June’s presidential elections. Peru’s Sol slid 1.14% to close at 3.6730 per dollar, the largest daily loss since November. The sovereign’s 3.55% 2051 dollar bonds declined 1 point to 101.09 yielding 3.49%. Castillo is leading against the polarizing right-wing candidate Keiko Fujimori by 11%, according to the Ipsos Peru survey conducted between April 15 and 16. CDS spreads, which is the cost of insuring Peru’s debt against default over the coming five years, shortly rose to the highest since June. The S&P/BVL Peru General Return Index has seen the greatest fall since November. Castillo’s party announced plans to renegotiate mining contracts instead of seizing mining assets and confirmed that the constitution would remain unchanged unless the nation requested a referendum, if Castillo is elected president. Still, the poll “is a market negative signal.” It “defies the conventional wisdom and view of pundits and political analysts that Castillo’s radical and extreme policy/political platform would not appeal to most voters”, wrote Alberto Ramos, chief Latin America economist at Goldman Sachs.

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