Category: Chile

Banco Santander Chile has sold CLP61.4bn ($124.5m) in 2033 subordinated bonds denominated in the UF inflation-linked unit. The AA+ rated bonds priced at 89.80 with a 3.90% coupon to yield 4.65%. Santander’s own capital markets unit managed the sale.

Chilean chemical company SQM will invest $1bn through 2010 to increase production capacity in all its business lines as well as modernize production processes, says the company. With this investment, SQM expects to increase the total capacity of its potassium-based products by approximately 250,000 metric tons over the next 3 years, the company says. Additionally, SQM will invest in improvements to the company’s own railway system and construction of a new mining camp. SQM plans to finance the capex program with internally-generated cashflow, it says. Santiago-based SQM is a producer and distributor of specialty plant nutrients, iodine and lithium.

Angamos, a special purpose company wholly owned by AES Gener, is in the market with a $1.06bn 17.5-year project financing that sets a benchmark for Chilean borrowers. The senior secured facility, launched Tuesday, includes a 3.5-year construction period and is divided into three tranches: a $715 Korean Export Insurance Corp (KEIC) tranche at Libor plus 90bp, a $270m commercial tranche with a margin stepping-up from 135bp to 190bp over the 17.5-year time span, and a $75m 5-year letter of credit tranche, say bankers familiar with the terms. The KEIC tranche includes coverage of 95% of the company’s sales revenues for the time period. Proceeds are being used to finance the construction of two pulverized coal-fired power plants whose combined output will total 462MW. Gener also has power purchase agreements with two BHP Billiton subsidiaries for the life of the operation. ABN AMRO – soon to become RBS – and BNP Paribas are leading.

Chilean steel processor CAP has called for a stock holder meeting August 4 to discuss a $550m capital increase plan through an equity issue, it said Friday. The company, which is listed on the Santiago stock exchange, didn’t provide details on the offering, but said separately it was ramping up its investment with a $1.6bn program. CAP expects to raise its production to 17m tons from 8m between now and sometime between 2011 and 2012. The expansion will be financed by CAP’s cash on hand and new debt. The debt should not exceed CAP’s 2x combined Ebitda, which in 2007 was $288m, according to the Chilean outfit’s Web site. The project includes development of new pellet processing facilities in Northern Chile, as well as expansion and development of three mining blocks.

The Chilean central bank has raised its benchmark interest rate in 50bp, up to 7.25%, it says. The bank cites deteriorating inflation dynamics, especially in the energy and food sectors, as the main reason for the increase. Several research shops had forecast the hike based on the high June inflation numbers. In its June 10 meeting, the central bank increased the benchmark interest rate by 50bp to 6.75% from 6.25%.

Chilean miner El Abra will invest $450m in a new copper sulfur project that will extend production on its copper mine for a decade, says the company. The investment will be financed with the company’s own cash, says El Abra. The company expects to process 115,000 tons of copper sulfur per day, it says. El Abra is a joint venture between Arizona based Freeport-McMoRan Copper and Gold and Chile’s state owned copper operator Codelco.

Chile’s monetary policy committee will likely hike its benchmark interest rate 50bp to 7.25% this Thursday, according to Goldman analysts. “The central bank seems committed to sending a strong signal that it is determined to get a solid grip on the deteriorating inflation dynamics following another large and broad-based inflation surprise in June,” says the shop. The rate increase is likely to trigger an additional deterioration of inflation expectations, say the shop’s analysts. In its June 10 meeting, the central bank increased the benchmark interest rate by 50bp to 6.75% from 6.25%.

Chilean retailer Ripley said Friday it would seek to issue bonds in Peru denominated in dollars or Peruvian soles, to be worth up to $150m. Proceeds will be used to refinance existing debt and for capital expenditures, says Ripley in a filing. Details on tenor, pricing and underwriters are still forthcoming, says the company.

Spanish road operator Abertis and the Santander Infrastructure Fund II and have acquired stakes in two Chilean highway contracts for a total of EUR710.6m from Spanish builder ACS. The two bought 50% stakes in the 60km Autopista Central running through Santiago and the140km Rutas del Pacifico connecting Santiago with Valparaiso. The roads come with concessions extending to 2031 and 2026, respectively.

S&P has placed its BB- ratings on Chilean investment company Sociedad de Inversiones Pampa Calichera (Pampa) on credit watch negative. “The credit watch action is based on the sizable amount of debt obtained at the controlling holding companies above Pampa that was used to strengthen Julio Ponce’s stake in Pampa,” says the agency. Those transactions included the acquisition of several minority stakes coupled with the acquisition of a 49% stake in YARA International at Inversiones SQYA, Pampa’s ultimate parent. Following those acquisitions, Ponce increased his stake in Pampa to about 70.37% from 25.13%, S&P adds. “As a direct consequence of these transactions, Pampa will face significant financial pressure to upstream cash to its parent structure, and therefore we would follow a consolidated approach to determine the impact on Pampa’s credit quality,” S&P adds. Pampa is a holding company whose sole activity is to hold shares of Chile-based chemical producer SQM, S&P adds.