Category: Chile

Chile’s earnings from its copper exports rose 91% in September, year on year, to $3.2 billion, and were up just over 8% on a monthly basis, according to the country’s Central Bank. Chile, which is the world’s largest copper producer, exported $24.5 billion worth of the mineral in the first nine months of the year, up 88% compared with the same period last year. The value of Chile’s copper exports continues to soar with international prices still at record highs. Despite production stoppages this year at both state-owned and private mines, copper output has been at near maximum capacity.

Chile’s Central Bank decided to leave its benchmark interest rate unchanged at 5.25% at its monthly meeting Thursday. This is the third time in as many months the Bank has chosen to hold rates steady. The move was anticipated by the markets following three consecutive months of slowing economic growth. Chile’s expansion in the second quarter fell to 4.5% from 5.3% in the first quarter as energy costs continued to rise, investment growth declined and a slowdown in copper production dampened exports. The country posted inflation of 0% last month, taking annual inflation down to 2.8%.

Chile’s largest retail group, Distribución y Servicios (D&S), sold debt securities worth $26.1 million in the local market Wednesday, at a nominal monthly interest rate of 0.49%. The paper matures in 364 days. The sale follows an issuance for the same amount last month to refinance debt. Also last month, the retailer’s real estate unit, Saitec, sold local, inflation-linked bonds worth $153 million, with a yield to maturity of 4.35%. The bonds had a tenor of 22.5 years. LarraínVial led both issues.

Chilean BCI Securitizadora placed $35.3 million-worth of securitized notes in the local market yesterday, Wednesday. The bonds, which carry a maturity of 6.11 years, at a nominal annual rate of 6.36%, were priced at a spread of 51 basis points over seven-year central bank securities. The bonds are backed by loans originated by the Caja de Compensación La Araucana. The offering was 70% oversubscribed and was coordinated by BCI Corredor de Bolsa. The bonds have been rated AAA/C by Fitch Ratings and Feller-Rate.

Chile’s trade surplus in September reached just over $2 billion on the back of exports of $5.17 billion and imports of $3.12 billion. September’s figures take the trade surplus for the first nine months of the year to $17.2 billion. Exports for January through September totaled $43.6 billion – up 47.5% year on year, while imports rose to $26.4 billion – up 18.7%.

Chilean development bank Banco del Desarrollo has priced a two-tranche local deal for the equivalent of $85 million in UF, the domestic inflation-indexed unit. It included a $50 million-equivalent, five-year bullet at 376 basis points over UF, or 74 basis points over the Chilean T-bill. There was also a $35 million equivalent 25-year final, 13-year average subordinated piece at 465 basis points over UF (158 basis points over government). The latter had a 13-year grace period. Pricing compared favorably to the 220 basis points spread seen for the same issuer last year, said a banker on the deal. IM Trust was the lead.

Chilean state-run copper miner Codelco is planning to return to the international capital markets for the first time in more than a year to fund investment needed to boost output at its mines, which are currently running at or close to capacity, according to analysts. The company is set to issue $500 million of 30-year bonds later this month. Bookrunners for the deal are Deutsche Bank and HSBC.

Geneva-based investment bank International Capital Partners, part-owned by Credit Suisse, has opened a representative office in Santiago, Chile. ICP is also planning a representative office for São Paulo. The boutique bank specializes in corporate finance for small to mid-sized capital.

The continuing decline in fuel prices led to 0% inflation last month in Chile, according to the country’s national statistics institute (INE), down from monthly inflation of 0.3% in August. The annual rate fell to 2.8%, the lowest level seen since last June. Analysts predict the unchanged prices in September will prompt the central bank to hold the overnight benchmark interest rate steady for at least another month at 5.25%. Growth slowed in the second quarter to 4.5% from 5.3% in the first quarter.

Chilean financial holding company, Corp Group, which controls Chile’s Corp Banca, is to sell its Venezuela bank subsidiary, Corp Banca Venezuela. The unit is to be sold to the controller of Venezuela’s Banco Occidental de Descuento (BOD), although no deal figure has yet been revealed. Corp Group said the sale was part of its strategy to focus on the group’s core business in Chile.