Peru to Sell $500 Mln in Bonds as Overseas Borrowing Doubles

Peru plans to issue debt overseas in 2014 after a two-year absence as the government boosts spending, Finance Minister Miguel Castilla said.

The government will sell $500 million in bonds in the international markets to pay for infrastructure projects as part of a plan to raise $2.4 billion of financing abroad, twice this year’s target, Castilla said in Congress.

President Ollanta Humala’s government is boosting spending to offset slower private investment after metal exports slumped. The economy expanded 4.4 percent in June, the second-slowest pace in more than three years. A decline in mining royalties won’t affect public works, Castilla said.

“We have lower levels of debt compared with countries like Brazil, Colombia and Mexico, which allows us to adopt counter-cyclical policies,” he said during a presentation of the 2014 budget.

The government is proposing to increase spending 9.7 percent to a record 119 billion soles ($42.4 billion). Local bond issuance will reach as much as 2.65 billion soles, including 1 billion soles to partly finance a $6.5 billion subway project for Lima, according to government’s 2014 debt bill.

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