Citibank Peru is working on the country's first "Brady-stripping" deal. The transaction, up to $100 million in size, will consist of zero-coupon bonds, which could have up to a 17-year term and will be backed by the interest rate flow from the Brady bonds.

"What we are doing is taking the Brady bonds and striping them into longer and shorter maturities," explained Alberto Carrera, a banker with Citibank Peru. "By doing that we are widening our investor base because different investors are looking for different tenors. We will also be providing added value to investors who are otherwise reluctant to buy Brady bonds because of the price risk involved."

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