The Municipality of Lima’s S/245 Million Bond Offering

Cleary Gottlieb represented Itau BBA USA Securities Inc., as initial purchaser, in the follow-on issuance of S/245 million (approx. $70 million) of bonds issued under the second securitization program originated by the Municipality of Lima.

The offering priced on September 23, 2025, and closed on September 30, 2025.

The bonds constitute part of the same series of the S/1.3 billion (approx. $371.4 million) of bonds issued in June 2025 under the same program, aggregating to a total of S/1.545 billion (approx. $441.2 million) of bonds issued under the program. Cleary had advised the initial purchaser in the set-up of the program in June 2025, which was structured as a Peruvian securitization regime backstopped with the cashflows of certain taxes of the Municipality of Lima (the FONCOMUN, Predial, and Casino and Slot Machine taxes). These cashflows were assigned to a Peruvian trust created by Lima 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 accounts, including the payment account and the debt service reserve account.

Credicorp Capital Sociedad Titulizadora S.A. is acting as Peruvian trustee of the issuer, and Gospa Capital Inc. acted as financial advisor to the Municipality of Lima. Cleary had advised the initial purchaser in the creation of a similar program by 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 Lima’s development program, including several infrastructure projects.

This reopening 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.