Lima’s S/1.3 Billion Offering

Cleary Gottlieb represented BofA Securities Inc., as initial purchaser, in the structuring of a new securitization program originated by the municipality of Lima (Lima) for the issuance of Peruvian-law governed bonds and in the first issuance thereunder of S/1.3 billion (approx. $358.1 million).

The offering priced on June 9, 2025, and is scheduled to closed on June 16, 2025.

The program has been structured as a Peruvian securitization regime backstopped with the cashflows of certain taxes of the Lima (the FONCOMUN, Predial, and Casino and Slot Machine taxes). These cashflows have been assigned to a Peruvian trust created by the municipality, and the trust issued the bonds under the program, which were sold to international investors under Rule 144A and Regulation S. Additionally, Lima has extended a Peruvian law-governed guarantee to cover potential shortfalls in specific trust related accounts, including the payment account and debt service reserve account.

Credicorp Capital Sociedad Titulizadora S.A. is acting as Peruvian trustee of the issuer. Cleary advised BofA Securities Inc. in the creation of a similar program by the Lima in December 2023.

The bonds are denominated in Peruvian soles but payable in U.S. dollars, clear through the DTC system and are expected to be listed on the Singapore Stock Exchange. Lima intends to use the proceeds of the bonds to finance the municipality’s development program, including several infrastructure projects.

This new program evidences the success of this novel kind of securitization program, which allows the issuer to access the international capital markets through Peruvian law-governed bonds that clear through the DTC system.