Category: Chile

Chilean department store Ripley is preparing to auction about 136m new shares Monday, which could raise an estimated $170m. Ripley also plans to offer current shareholders an additional 24m shares through January 15, which is expected to net the company $30m. The $200m will be used to finance Ripley’s $588m 2008 investment plan in Chile and Peru. In the coming three years, Ripley plans to issue an additional 240m new shares.

Chilean utility holding company Enersis has filed to issue about $487m in local UF-denominated bonds. The company did not give a timeframe for the bond sale, with which it will finance an investment plan. Santander will manage the offering. Parent Endesa plans to invest $1.2bn in LatAm next year.

Chilean utility holding company Enersis has filed to issue about $487m in local UF-denominated bonds. The company did not give a timeframe for the bond sale, with which it will finance an investment plan. Santander will manage the offering. Parent Endesa plans to invest $1.2bn in LatAm next year.

Fresenius Kabi, a unit of Germany’s Fresenius, is acquiring Laboratorio Sanderson, the Chilean IV drugs and infusions firm. Privately owned Sanderson employs around 375 people in Chile and Peru and forecasts 2007 sales of EUR19m. The takeover should close in January.

Chilean generator AES Gener has issued local bonds worth about $220m. It priced $47m in 2015 UF-indexed bonds, at 3.85%, and $173m in 2028 UF-indexed bonds at 4.3%. Proceeds will be used to finance local expansion and refinance debt. IM Trust was the bookrunner.

Chile has named Jose De Gregorio as the country’s central bank president. He currently serves as the central bank’s vice president and replaces Vittorio Corbo, whose five-year term is ending. “Jose De Gregorio is a renowned economist with international and government experience seen as orthodox and fully committed to the current inflation targeting regime within a free floating FX regime,” says Goldman Sachs. “We do not expect to see any noticeable change in the way the central bank conducts monetary policy,” it adds, calling Chile’s central bank “one of the most credible in the region and one of the most transparent in the conduction of monetary policy.” Sebastian Claro is set to join the central bank board, which together with De Gregorio, Goldman sees as a market neutral to positive development. The immediate challenge is inflation.

Chile has named Jose De Gregorio as the country’s central bank president. He currently serves as the central bank’s vice president and replaces Vittorio Corbo, whose five-year term is ending. “Jose De Gregorio is a renowned economist with international and government experience seen as orthodox and fully committed to the current inflation targeting regime within a free floating FX regime,” says Goldman Sachs. “We do not expect to see any noticeable change in the way the central bank conducts monetary policy,” it adds, calling Chile’s central bank “one of the most credible in the region and one of the most transparent in the conduction of monetary policy.” Sebastian Claro is set to join the central bank board, which together with De Gregorio, Goldman sees as a market neutral to positive development. The immediate challenge is inflation.

Empresa Electrica Guacolda has wrapped up syndication of a 15-year $260m project deal for the construction of a 152MW power plant near Maitencillio, Chile, the fourth in a series. Pricing begins at 85bp over Libor, stepping up to 140bp. Calyon is the lead, with agent banks Scotia and CorpBanca. ABN Amro, Itau, Banco Estado and Caja Madrid also participated. Guacolda is jointly owned by AES Gener (50%), local industrial conglomerate Empresas Copec (25%) and Ultraterra (25%). Calyon is also currently syndicating a $240m 19-year loan to refinance debt at the 230MW Termoelectrica de Penoles plant in Tamuin, Mexico, which was purchased by AES earlier this year.

Chile is in for two years of stagnation, according to research from BCP. “It is time to man the bulwarks,” says BCP’s head of research Walter Molano. “We are in for a rough patch.” Positives for the credit include good infrastructure, a trade surplus of almost $20bn and another $20bn in the copper stabilization fund. However, it is exposed to a downturn in commodities and failed to maximize the benefits of the commodity boom. “Chile lacks the labor productivity needed to increase the value-added content of its basic commodity production. This is the reason why Chile will suffer when commodity prices fall and the windfall evaporates,” says BCP. The shop points to a fall in copper prices and wood exports to the US and the impact that external events are having on Chilean asset prices, including a 12% retracement in the bolsa during the past month, as well as widening bond spreads. BCP predicts 2008 growth of close to 4.3% year-on-year, and 2007 inflation of almost 7%, twice that of 2006. “The combination of slower growth and rising consumer prices will increase the misery level – producing an effect commonly known as stagflation,” says BCP.

Chile’s Quintero LNG import terminal project is soliciting bids for up to $1.16bn in project financing, according to local media and wire reports. Project company GNL Chile said that it aims to complete the financing process in the first quarter of 2008. HSBC is financial advisor on the $940m project backed by BG Group (40%), Enap (20%), EOC (20%) and Metrogas (20%). The 10m cubic meters a day terminal is under construction in Quintero Bay, on Chile’s central coast, and expected online by 2009.