Category: Chile

Chilean Banco Falabell has been upgraded to AA from AA minus on a national scale with a stable outlook by Fitch. The upgrade is a result of the upgrade of parent company, Chilean retailer Falabella. The reason for the upgrade is due to a significant recovery in 2010 and the beginning of 2011. The reduction in costs as well as the expansion of its credit portfolio to a wider range of clients contributed to the change in rating. In 2011 the level of risk in the consumer industry in Chile is also expected to fall, which Fitch says will also have a positive impact on the company.

A May 18 daily brief titled “Chilean Scarcity Drives Gildemeister Debut” misstated the credit rating of Automotores Gildemeister. It is rated BB/Ba1.

Chile’s central bank reported that GDP grew 9.8% by the end of Q1 2011 over the year before, meeting market consensus. That is up from up from 5.8% yoy growth during Q4 2010. Growth was driven by the fishing sector (+36.6%), agriculture and forestry (+15.8 %), transportation (+14.0%), retail (+13.0%), and manufacturing (+11.1%).

MSCI added Pesquera Camanchaca and Paz to its Small Cap Chile index, according to its website. It also added Desarrolladora Homex, Grupo Herdez and Promotora Y Operadora de Infrastructura to its Small Cap Mexico index and Gold Fields La Cima to its Small Cap Peru index. Meanwhile, Cicsa, Inmuebles Carso, Maxcom and Vitro were all removed from the Mexico index while Empresa Siderurgica was removed from the Peru index. ECL had been rumored to be added to the list, but was not included.

Chilean builder SalfaCorp plans to raise CLP61.88bn ($131m) through a private share subscription open to existing holders, according to a company finance official. It has set a price of CLP1,650 for each of the 37.5m shares available in the offer. This is half of the 75m shares it had been authorized to sell. Proceeds will help fund the acquisition of 80% of Panamanian builder Intercoastal Marine. SalfaCorp shares closed at CLP Wednesday. Salfacorp shares closed Wednesday at CLP1,834.40.

Chilean food company Watt’s has issued UF2m ($92m) in 5-year and 20-year bonds, for UF1m each. The 5-year notes priced at 99.63 with a 3.40% coupon to yield 3.48%. Demand came from insurance companies and pension funds. The 20-year bond priced at 103.5 with a 4.2% coupon to yield 3.88%. Mutual funds and insurance companies were the main investors in that tranche. The deal received over 4x demand, according to a banker on the deal. “This is a good issuer, it has some new lines of business and has not come to the market in several years, so there was strong demand,” he says. LarrainVial was the sole lead. The notes are rated A on a national scale and the proceeds will be used to pay down short term debt. Watt’s last came to the local market in September 2008, pricing $79m equivalent in 2015 UF bonds, at a 4.25% yield. The company’s board authorized a bond shelf of up to UF6m ($274m) in March.