Category: Chile

Cristalerias de Chile is set to sell today $76m equivalent in inflation-linked bonds on Chile’s domestic market. The glassmaker is offering investors UF2m ($76.4m) through a combination of 3.25% coupon 2014 bonds and 3.75% of 2030s that feature a 2-year grace period. Proceeds from the sale, rated AA on a national scale, will refinance debt. IM Trust is managing the transaction. Cristalerias last visited the domestic market in 2005, selling $54m equivalent in 3.4% of 2026 UF bonds, also via IM Trust.

Chile’s Moneda Asset Manager has named Javier Montero co-portfolio manager of international fixed income strategies, including Moneda deuda Latinoamericana and Moneda LatAm debt funds. He will work alongside Fernando Tisne. For 7 years Montero, an Argentine national, was a partner at Copernico Capital Partners where he held the position of portfolio manager, running event driven and credit strategies. Previously, he worked for 4 years as portfolio manager at Arauca Bit, an Argentine pension fund, where he was in charge of investment strategy for equity and corporate debt, as well as a member of the fund’s investment committee. As of July 2009, Moneda had more than $3.2bn in assets under management, including $2.2bn in discretional funds focused on LatAm equity and fixed income. Moneda also has a distribution agreement with The Capital Group Companies, based in the US.

Chile’s Transelec has concluded a tender offer for its 7.875% 2011 bonds – an anticlimactic announcement as offers had well exceeded the $220m limit at the July 28 early participation date. Holders of $351m, or 75.67% of the outstanding bonds, accepted the offer that expired August 14, and will receive allocation on a pro-rata basis. Transelec will pay holders $1,071.87 per $1,000.00. The electricity transmitter is funding the $220m repurchase with proceeds from the sale of $306m equivalent in 2014 and 2031 notes. HSBC managed the tender and LarrainVial the domestic sale.

Chile’s Banco del Estado has set September 1 to issue domestic bonds denominated in the UF inflation-linked unit. The bank plans to sell UF2m ($75m) in 4.0% 2029 bonds. Its own brokerage unit will coordinate the sale, rated AAA on a national scale. The issue comes under a UF30m shelf, from which it last sold UF5m in 3.5% 10-year bonds in June.

Chile’s Factorline is preparing to sell CLP20bn ($36m) in 5-year bonds. The Chilean leasing company controlled by Grupo Massu is meeting investors through Tuesday, with an aim to price the transaction August 27. The bonds are expected to have a coupon of 7.2% and proceeds will support the growth of its auto loan portfolio, it says. Banchile is managing the sale, rated A minus on a national scale.

As expected, Chile’s central bank has kept its monetary policy rate unchanged, leaving it at 0.50%, a historic low. The bank says it will keep rates at this level for “a prolonged period.” It also explains that growth prospects have stabilized, benefitting the financial markets.

Chilean electric transmitter Transelec has sold $303m-equivalent in local bonds denominated in CLP and the UF inflation-linked unit, it says. The company says it is is looking to convert its liabilities from dollars to local currency to match its revenues. It placed UF3.3m ($127m) in 3.900% 2014 bonds at 100.43 to yield 3.800%, CLP33.6bn ($62m) in 5.7% 2014s at 99.65 to yield 5.780% and UF3m in 4.800% 2031s at 100.09 to yield 4.790%. Proceeds from the sale, rated A/A+ on a national scale, will support Transelec’s buyback of up to $200m of its outstanding 7.875% 2011 bonds, now being tendered through an offer set to expire today. Holders representing more than $352m have accepted so far, the company says, and it plans to determine the amounts to be repurchased from each holder on a pro-rata basis. LarrainVial managed the sale, and HSBC is dealer-manager on the buyback.

Chile is expected to leave its monetary policy rate unchanged at its historic low of 0.5% today. The central bank has said it would keep the rate at this level for an extended period of time. Morgan Stanley believes the focus on the rate decision should be on the likelihood of any additional measures by the central bank to boost liquidity.

Chile steelmaker Cap will meet with bondholders on August 28 to negotiate changes to its bond covenants. Santander, the company’s advisor, says in a letter to the local stock exchange that it will seek changes to the company’s capital requirements as outlined in the bond indentures. In July, S&P placed the company’s BBB minus rating on credit watch negative, saying it expects significant deterioration in its financial risk profile. “We expect that weaker cashflow generation and financial ratios could potentially reduce the company’s high cash position of $381m as of March 31,” S&P says. Separately, Cap said earlier this week it has been approached by Mitsubishi, one of its partners, which is interested in acquiring a stake in iron ore producer Minera del Pacifico.

Chilean electric transmitter Transelec is expected to sell $303m-equivalent in local bonds today, and has announced the premium it will pay holders accepting its tender expiring Thursday. Transelec will offer $1,071.87 per $1,000.00 for its outstanding 7.875% 2011 bonds, plus an extra $30.00 per $1,000.00 to holders who had accepted before July 28. Holders representing more than $352m have accepted so far, the company says, exceeding the $220m limit. Transelec will determine the amounts to be repurchased from each holder on a pro-rata basis, once the offer is concluded Thursday. It will fund the repurchase with today’s domestic issuance. Transelec plans to sell UF3.3m ($127m) in 3.9% 2014 bonds, CLP33.6bn ($61.5m) in 6.2% 2014 and UF3m in 4.8% 2031s, according to bankers managing the sale, though those amounts could change based on demand during the sale process. Transelec has the ability to sell up to a total UF7.9m-equivalent across the three tranches. LarrainVial is managing the sale, rated A/A+ on a national scale and HSBC is dealer-manager on the buyback.