Category: Chile

Chile’s fiscal surplus for the first nine months of the year reached 6.5% of GDP, driven up by the record international copper prices that have earned the country windfall revenues from the export of its main commodity. The figure for the first three quarters of the year compares with a surplus of 3.7% of GDP for the same period last year. During the third quarter, the fiscal surplus reached 2.4% of GDP; the government is forecasting a record surplus amounting to 7.6% of GDP for the whole of the year.

BCI Securitizadora, a unit of Chile’s fourth-largest bank, placed $25 million worth of financial securitization Thursday. The notes, rated AA by ratings agency Feller, have a maturity of 5.25 years and will yield 6.5% annually. At the start of October, the company placed $35.3 million-worth of securitized notes in the local market at a nominal annual rate of 6.36%.

Chile’s industrial production fell unexpectedly in September, down 2.6% year on year, according to the national statistics institute (INE). This is the largest decline since January 2003 and, even allowing for two fewer working days versus last year, the drop was 2.1%. Industrial sales were also down in September, by 2.7% year on year. Industrial output for the year through September was 3.4%, the Institute said.

Chilean state railway company EFE will stop a three-year, $300 million investment program as it continues to pile up losses, according to an unnamed company official. The company posted losses of $30.4 million in the first half of the year and will now submit a new business plan to the government aimed at moving it into profit.

Chilean state-run copper miner Codelco successfully sold $500 million of 30-year bonds in the international markets Thursday, achieving a remarkable spread of 128 basis points over comparable US Treasuries, 2 basis points below the yield of its 2035 bond. The bonds sold with an annual coupon rate of 6.15%. Deutsche Bank and HSBC led the deal. Codelco will use the money raised to finance part of its debt and for capital expenditure. Codelco last tapped international markets in September 2005 when it sold $500 million of 30-year bonds, at a rate of 5.625%.

Spanish telecoms operator Telefónica, the largest foreign player in its sector in Latin America, is planning to invest $1.5 billion in its operations in Chile over the next three years. The money will be spent on expanding networks and infrastructure. The Spanish telco controls the country’s largest fixed-line operator, Telefónica de Chile (CTC), as well as the largest mobile phone operator, Telefónica Móvil. The announcement comes after Chile’s telecoms regulator indicated it would be loosening regulation in the sector in the near future.

Boston Securitizadora, the Chilean securitization unit of Bank of America, placed $29.5 million worth of securitized bonds in the local market Tuesday. The bonds carry maturity of 3 years and nine months and were sold with an annual nominal rate of 6.08%. The duration of the paper is 1.38 years. The bonds are backed by a pool of car loans originated by Forum, the country’s leading car finance company, which is controlled by BBVA. BancoEstado arranged the issue. The bonds are rated AA/C by Fitch Ratings.

Chile’s second-largest retailer, Cencosud, has finally reached an agreement to sell off its 22.55% stake in shopping center operator Mall Plaza to fellow shareholders. Cencosud sold its share in the operator for $135 million to shareholders that include leading retail chain Falabella. Cencosud acquired its stake in Mall Plaza when it bought department store chain Paris at the start of last year.

Chilean pension fund Santa María, a subsidiary of the Dutch bank ING, has appointed Eric Conrads to be its new head of investment to replace Ernesto Hevia who has resigned. Belgian-born Conrads had served as head of foreign investment at the pension fund administrator.

Ratings agency Moody’s Investors Service has awarded a rating of Aa3 to the upcoming bond issue of Chilean state-run copper miner Codelco. The company is planning to issue $500 million of 30-year bonds in the international markets before October 20. The bookrunners for the deal are Deutsche Bank and HSBC. Codelco will use the money raised to finance part of its debt and for capital expenditure. Codelco last tapped international markets in September last year when it sold $500 million of 30-year bonds, at a rate of 5.625%.