HALISTER1: Deutsche Bank Says Reduce Peru Credit on Risks From Scandal

Deutsche Bank Says Reduce Peru Credit on Risks From Scandal

(Bloomberg) -- The Odebrecht corruption scandal that’s entangled Peru’s ex-president could damage the perception of the government and lower economic growth due to delays in several major projects, Deutsche Bank strategists including Guilherme Marone and Sebastian Brown write in note.
  • Bank recommends reducing Peru credit to marketweight on lower risk, reward
  • It favors Soberanos 26s and 31s bonds on lower FX volatility, improved external credit conditions and fairly light positioning
  • Copper prices need to correct before the the bank said it will resume trades in EMFX crosses that include long PEN leg
  • NOTE: A prosecutor alleged last week that former President Alejandro Toledo received $20m in payments from the Brazilian construction firm Odebrecht in exchange for awarding it a highway contract; Toledo has denied any wrongdoing
  • NOTE: Peru Judge Orders Former President Toledo’s Arrest in Graft Case
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Guilherme Marone (Deutsche Bank AG)
Sebastian Brown (Deutsche Bank AG)
Alejandro Toledo Manrique (Republic of Peru)

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