Law and regulation of Covid-19 loan moratoriums in Peru

1. Description of the legislation

1.1 Is there a moratorium on loans legislation implemented in your jurisdiction?

Yes.

1.2 If no: Are there any ongoing discussions regarding a potential introduction of such measures?

Not applicable.

1.3 What is the name of the relevant legislation (the “Relevant Act”)?

Multiple Office No. 11150-2020-SBS, dated 16 March 2020, issued by the Peruvian Superintendency of Banking, Insurance and Private Pension Fund Administrators (the “SBS”).

1.4 What is the duration of the measures (period of moratorium)?

Depending on the decision of each financial institution, the period of moratorium can be established for up to 6 months from the original term of the loan.

1.5 Does the legislation provide for an extension of the period of moratorium?

No.

1.6 Is the moratorium mandatory, or can each borrower opt out should they wish to simply continue payments, or opt in if they want to be protected by the moratorium?

The moratorium is not mandatory. The financial institution decides if the moratorium is applicable or not to the loans.

2. Parties and agreements affected by the Relevant Act

2.1 Is the moratorium available for both corporate and consumer loans?

Yes.

2.2 Who are the affected Lenders?

The Lenders subject to the Relevant Act are only the Peruvian financial institutions supervised by the SBS.

2.3 Does it make a difference whether loans are granted by a foreign entity and governed by foreign law?

Such loans are not subject to the Relevant Act.

3. Impact on the loan agreements

3.1 Is there a cut-off date with respect to loan agreements to which the Relevant Act will apply (e.g. not applicable to loan agreements entered into after the cut-off date)?

Yes, it will apply to outstanding loans as of 16 March 2020. Also, the applicable loans shall not be under default.

3.2 Does the moratorium apply to principal only, or also to interest and/or fees?

The moratorium can apply to principal, interest and/or fees.

3.3 Will the maturity of the loan automatically be extended by the moratorium period?

If the financial institution decides to apply the moratorium period, that as already mentioned can be established for up to 6 months from the original term of the loan, the maturity of the loan shall be automatically extended for the corresponding moratorium period.

3.4 Are repayments and interest which have become due and payable under the contract before the Relevant Act has come into force covered by the moratorium?

The loans subject to the Relevant Act shall not be under default, thus, any payment that became due and payable before the Relevant Act shall be paid in order for the loan to be subject to the moratorium period.

3.5 Will lenders be able to terminate a loan due to an event of default other than non-payment (e.g. breach of financial covenants)?

Yes.

Portrait ofJuan Carlos Escudero
Juan Carlos Escudero
Managing Partner
Lima
Carlos Calderon