Category: Chile

Santander Chile was set to begin meeting investors today in London, and travel to see the US buyside next week. The bank has not indicated details of a new transaction. Deutsche Bank, JPMorgan and Santander are managing the tour. The A+/Aa3 bank sold $500m in 2012 floating-rate bonds in April through Deutsche and Santander, and then met Asian investors in May.

Chile’s Banco Bice is planning to issue UF1m ($43m) tomorrow via a Dutch auction, the banks says in a regulatory filing. The notes will mature in 25 years. Bice Inversiones, the bank’s brokerage unit, will manage the sale.

Celulosa Arauco y Constitucion is preparing a new 2020 benchmark-sized bond. The Chilean paper company, rated Baa2/BBB/BBB+, will start pitching investors today in New York and visit Los Angeles before finishing Monday in Boston and London. A size of $500m looks likely, depending on demand. JPMorgan and Santander are the leads. Arauco has been raising funds domestically, including last week’s UF5m ($214m) 2020 bond. It placed $500m in 2019 dollar bonds in July 2009.

Molymet plans to sell 10% of itself on the Chilean stock market in November to raise $200m equivalent for its expansion plans. Banchile Citi and IM Trust are managing the sale. Molymet’s 4-year expansion plan is aimed at fulfilling growing demand of molybdenum, a copper by-product used to strengthen steel, as the world economy recovers and steel consumption grows in Asia. Molymet sold $102m equivalent in Mexican peso bonds last month. In March it agreed to buy China’s Luoyang High Tech Molybdenum & Tungsten Materials for $37.7m.

Chilean paper company Celulosa Arauco has placed UF5m ($214m) in local 10-year bonds. The notes priced at 100.57 with a coupon of 3.25% to yield 2.93%, a spread of 53bp over the government benchmark. Proceeds will be used to refinance debt. BBVA and Corp Capital Corredores led the sale. Arauco is rated AA on a national scale.

Chile-based bottler Coca-Cola Polar has issued 2 series of local bonds worth UF2.5m ($160m). A 5-year UF1m tranche priced at 100.31 with a coupon of 3.00% to yield 2.93%, or 56bp over the government benchmark. A 21-year UF1.5m tranche priced at 106.05 with a coupon of 4.00% to yield 3.48%, or 54bp over the 20-year government benchmark. Proceeds will be used to refinance debt. IM Trust and Penta Corredores handled the sale, rated AA minus on a national scale. Also in Chile’s domestic market, Celulosa Arauco is expected to issue today up to UF5m ($211m) in local 2018 and 2020 bonds, both paying 3.25% coupons.

Two of Chile’s larger corporates are expected to price domestic bonds this week, according to analysts and offering documents. Bottler Coca-Cola Polar is planning to issue up to UF2.5m ($160m) Wednesday, in as many as 3 series. A 2017 UF-denominated tranche with a 3-year grace period which begins amortizing in 2014 pays 3.0%. A similar peso-denominated piece comes with a coupon of 6.5%. A 2031 UF tranche with a 3-year grace period and amortization starting in 2021 meanwhile pays 4.0%. IM Trust and Penta Corredores de Bolsa are managing the transaction, rated AA minus on a national scale. Pulp and paper producer Celulosa Arauco plans to issue up to UF5m ($211m) in local 2018 and 2020 bonds, both paying 3.25% coupons. BBVA and Corpbanca are managing the sale, expected to happen Thursday.

Several Chilean corporates are among cross-border bond issuers lining up for the traditional September-October LatAm issuance spree. Banco del Estado is heard having mandated Deutsche Bank and JPMorgan for a new deal, while state-owned miner Codelco is picking banks for a new benchmark-sized transaction. Others rumored to be considering issuance are pulp producer CMPC, retailer Falabella and Telefonica Moviles Chile. Issuance from the latter 2 would mark international debuts. “Liquidity available [internationally] is very strong, as are the reputations of Chilean issuers, and the [new $1bn 2020] government bond has set a nice benchmark,” Diego Torres, corporate debt analyst at Santiago-based Munita, Cruzat y Claro in Santiago, tells LatinFinance. Such conditions set issuers up for low yields, he explains. The domestic market, where depth and favorable conditions have long kept many top issuers at home, are still strong, he says. However, scale and cheaper hedging costs due to improved FX rates may push some to international markets. Falabella is one looking at both options, bankers say. “Diversity away from the Mexican and Brazilian issuers would be very good for us,” says a West Coast-based EM investor. He anticipates at least 4 issuers from Chile by the end of the year. Chemical producer SQM, Banco Santander Chile, and energy companies ENAP and Colbun have issued dollar bonds this year, raising $1.25bn.