Category: Chile

La Polar, a Chilean department store retailer, sold $265m in peso-denominated bonds across two tranches Friday, according to Dealogic. The company issued $75.8m in 5-year notes at par to yield 3.510% and $189.5m in 10-year notes also at par to yield 3.836%. Proceeds are for general corporate purposes. BBVA Corredores de Bolsa placed the issue.

Scotiabank said Friday it agreed to acquire 100% of Banco del Trabajo for an undisclosed amount. The Canadian bank and Chilean holding company Grupos Altas Cumbres, which controls the bank, announced the agreement that gives Scotia the option to buy 100% of the shares until February, according to local press reports. Banco del Trabajo is Peru’s ninth largest commercial bank and provides SME and consumer lending, as well as financial brokerage services. Scotia’s last major investment in Peru was a $330m purchase of Banco Wiese Sudameris.

Chilean copper and aluminum products manufacturer Madeco expects to book net profit of $283m from the sale of its copper wiring unit. Madeco announced the $793 sale to France’s Nexans earlier this week, which included $420m in cash and $372m in Nexan shares, giving Madeco a 9% stake in the French company and making it the single largest shareholder. The sale is expected to be completed in June. Madeco is controlled by the Luksic family, which also holds majority stakes in Banco de Chile and Antofagasta.

As expected, Chile’s central bank monetary policy committee kept its key policy rate unchanged at 5.75%, in line with forecasts and the broad market consensus. The tone of the press release was relatively neutral and the committee noted a tougher external market. “While the relevant external backdrop for the Chilean economy remains positive the risk of adverse external scenarios increased,” says Goldman Sachs. It adds that the central bank might have at some point to resume the rate hiking cycle in order to protect the 2008 inflation target. The peso should remain well anchored by the widening domestic-foreign interest rate differential, it adds.

Chile’s central bank monetary policy committee is expected to leave rates unchanged at 5.75% after it meets today. The decision will be swayed by benign recent inflation readings and concerns about the external environment, say analysts. Despite this, Goldman Sachs warns that inflation dynamics remain quite challenging, especially as the Chilean economy is still one of the most indexed in the region. In addition, it faces gasoline and energy tariff increases in the pipeline. “Against that backdrop, in order to remain ahead of the curve and reduce the risk of contamination of other prices in the economy, the central bank might have at some point to resume the rate hiking cycle in order to protect the 2008 inflation target,” says Goldman.

AquaChile, the salmon producer, is in no hurry to complete its local and international equity offering worth up to $250 million, according to a banker on the deal. “We’ll look for the best market,” says the official, adding that it will probably not happen until 2008. IM Trust is the lead. Meanwhile, a $64 million local rights offering for Clinica Las Condes, which was expected by the end of November, has closed. The stock was placed entirely with existing shareholders.

Codelco, Metrogas and ENAP, the winners of the concession to build a new LNG terminal in Chile called GNL Quintero, have an RFP out for a project loan that could raise as much as $800m, say bankers away from the transaction. The deal will command an estimated investment of $940m and will be completed by 2009. According to a timeline announced for the project earlier this year, financing is supposed to take place in the first quarter of 2008. A number of lenders are expected to pitch for the loan mandates, and HSBC has been hired to advise the consortium on financing.

Ashmore Investment Management arm AEI has agreed to buy stakes in power companies in Jamaica, Peru and Chile. New Jersey’s Public Service Enterprise Group has agreed to sell its 50% stake in Chile’s Chilquinta Energia and 38% interest in Peru’s Luz del Sur to AEI for $685m, in a sale expected to close by the end of the year. Michigan-based CMS Energy, another US utility shedding LatAm assets this year, has agreed to sell its stake in Jamaica Private Power to AEI, which will now control 84.4% of the company. The price of the Jamaica purchase was not disclosed. The sale completes a LatAm divesture plan that has netted CMS $1.5bn this year.

Chilean power company Compania General de Electricidad (CGE) has issued UF-denominated local bonds worth $113.7m at 3.49%. Proceeds will fund part of CGE’s $660m acquisition of Empresas Emel, from PPL Corp. Earlier this week, CGE obtained two loans from BBVA totaling $517m, also to finance the purchase.