Category: Chile

Chile water utility Aguas Andinas says it plans to issue up to UF4m ($168.8m) to refinance debt and finance investments. It adds that the issue will be made either in UF or in CLP. A company spokesman says the sale is expected to take place early in 2010 and that banks to manage the sale have not been selected yet. In May, Aguas Andinas sold UF2m 2015 bonds with a 3.1% coupon priced at 99.24 and yielding 3.88%, and UF1m in 2017 bonds with a 3.6% coupon to yield 4.27%. LarrainVial and BBVA managed that transaction, which was rated AA+ on a domestic scale.

Santiago’s subway company, Metro, says it has sold UF4m ($170m) on 25-year bonds at 99.50 with a coupon of 4.50% to yield 4.54%. A banker away from the issue says total demand for the bonds reached UF6m ($255m). The bonds have a local AA rating from Humphreys and Fitch. Proceeds will be used to help finance the $1.3bn expansion of the Santiago subway system, the company says. Santander led the issue.

The subway company of Chile’s capital, Metro, says it will issue today UF4m ($169m) in bonds through a Dutch auction. The bonds, with a local AA rating from Humphreys and Fitch, have a tenor of 25 years. Proceeds will be used to help finance the $1.3bn expansion of the Santiago subway system, the company says. Santander is leading the issue.

Chile’s CorpBanca says it has issued UF4.67m ($194m) in 26-year local subordinated bonds through a Dutch auction at 102.95 to yield 4.75%. CorpBanca is rated AA minus on a national scale. CorpCapital, CorpBanca’s capital markets unit, led the issue.

Chile’s CorpBanca is issuing up to UF4.67m ($194m) in bonds via Dutch auction. The bonds will be due in 26 years, the company says, adding that CorpCapital Corredores de Bolsa will lead the sale.

Chile’s central bank has left the policy rate unchanged at 0.50%, as expected. Goldman notes that the bank opted to shorten after December 14 the maximum maturity of the complementary liquidity facility to 150 days from 180 days, and plans to continue to reduce maturity of the facility by 30 days per month in order to extinguish it in May. “This in our view signals that the first policy rate hike should come at the earliest late in 2Q2010, and possibly only during 2H2010,” says Goldman.

Chile’s central bank is expected to keep its monetary policy rate on hold at a record low of 0.50% today. Morgan Stanley says the bank has signaled it may start a slow normalization of interest rates in Q2 2010 at the earliest, which is consistent with its view that the bank is in no hurry to hike rates. BofA-Merrill Lynch believes a drop in inflation supports a freeze on rates. Meanwhile, Bulltick thinks the bank will start hiking early in 2010 and be one of the first in the region to do so.

Chilean retailer Empresas Hites is planning to raise about $45m by issuing shares in the local market to pay down debt and finance its five-year expansion plan. The company, which has 12 stores in Chile, plans to open 10 more and remodel its stores in Santiago. It also says it does not discard the possibility of venturing into neighboring countries as part of its expansion plan. Banchile and BBVA are managing the issue and Carey & Cia is acting as legal advisor.

Santander Chile reigned in pricing on a $500m bond, locking in UST+157bp well inside initial whispers of 175bp area and tight to 160bp area guidance. Demand for the issuer’s first sale in 4 years reached about $2bn, according to bankers managing it. The bank priced the 2012 bond at 99.855 with a 2.875% coupon to yield 2.926%, or UST plus 157bp. The Aa3/A+ deal was heard trading at flat to up 0.125 points in the gray Monday afternoon. Despite the tightening, investors say there was still some incentive to participate. “There is a pickup relative to some AA minus level comparables,” says a New York-based EM investor, offering Nordea as an example. The Swedish bank rated AA minus sold $500m in 3-year bonds last week to yield UST+120bp, as part of a $2bn sale. Santander Chile’s existing dollar bonds are illiquid, investors say, and less useful as comps. Scarcity value for the financial sector may have also helped. The issuer chose the 3-year maturity as it was a good match for its funding needs and the most attractive point on the curve for swapping into CLP, says a banker on the deal. Deutsche Bank, JPMorgan and Santander managed the sale. Proceeds from the bond issue are earmarked for general corporate purposes. Largely able to fund itself in the domestic market, Santander Chile’s last dollar foray was in 2004, when it issued $400m in a 2009 at Libor+35bp and $300m in a 5.375% of 2014 via Deutsche and Santander.

Chilean power distributor Chilquinta has sold bonds worth UF6.5m ($257.2m) in 2 tranches, it says in a filing with the local exchange. The company did UF4.7m ($185.9m) in 5-year bonds at 99.69% with a 2.75% coupon to yield 4.27%. It also sold UF1.8m ($71.2m) in 21-year bonds at 98.37% with a 4.25% coupon to yield 3.11%. Proceeds will be used to cut debt and reduce exposure to foreign exchange rates. Chilquinta’s debt amounts to $224m, of which $200m is due in 2011 and the rest also short term, says IM Trust, which managed the issue. Fitch and Humphreys rate both tranches AA on a national scale. Chilquinta is 50% owned by AEI and 50% by Sempra Energy.