Category: Chile

Investment banks have a way to go to fully satisfy some of their Latin American issuer clients. Alfredo Ergas, CFO of Enersis, based in Chile, calls for a bank that can give a full range of services. “We need a holistic bank that can provide advice on taxes, local markets and a number of other things,” he says. He adds that he’s happy to pay the fees if a bank can bring him something he cannot find on his own. Richard Lark, CFO of Brazilian airline Gol, says there is not a bank in Brazil that can provide everything his company wants. “We haven’t been able to find all of the executions we want to do at one bank, and have had to work with two or three banks,” he says. Lark adds that the challenge for Brazilian banks will be to develop a new generation of seasoned advisors. Both were speaking on a panel with other issuers at the Latin American Borrowers and Investors Forum (Labif), a LatinFinance/Euromoney conference in New York.

Empresa Electrica Ventanas, a utility sponsored by AES Gener in Chile, is raising $440m through a 15-year project finance loan, according to bankers. Proceeds will refinance debt and fund the construction of a new coal-fired generation plant. The transaction is heard to be oversubscribed already, according to bankers away from the deal. It is expected to pay more than 100bp over Libor, say bankers. Calyon and Fortis are the leads.

Guillermo Larraín is to be the new head of Chile’s securities and insurance regulator, SVS, replacing Alberto Etchegaray who resigned last week. Larraín, an economist, was in charge of coordinating economic policy at the minister of finance and was responsible for the regulation of the pensions fund administrators between 2003 and 2006. He will take over the post as head of the SVS on May 14.

Banco Santander Chile, the country’s largest bank, in asset terms, sold $105m worth of local inflation-adjusted bonds on Wednesday. The six-year, AAA+ rated bullet bonds priced at a yield of 3.13%, equivalent to a spread of 49bp over 6.7 year local Treasuries. Interest will be paid quarterly from 1 August 2007.

Alberto Etchegaray, the head of Chile’s superintendency of securities and insurance, SVS, has resigned following controversy over his law degree. The regulator was accused of dishonesty with regard to his status as a qualified lawyer in Chile. While he does hold a law degree in that country, he had never practiced law as he had never been sworn in by the Supreme Court.

Chilean power company Endesa has sold $139m worth (4m UF) of inflation-linked bonds maturing in 20 years at a yield of 3.78%, which represents a spread of 82bp. Demand totaled $350m, according to local media. Proceeds raised will be used to fund a buyback of the company’s Series G notes.

Banco Santander Chile sold $173 million worth (UF5 million) of inflation-adjusted local bonds on Thursday. The four-year paper which matures February 1, 2011, was priced to yield 2.91, equivalent to a spread of 55 basis points over comparable 4.5-year Central Bank notes.

Chile’s Central Bank has held the benchmark overnight lending rate steady at 5%, the third consecutive month it has done so and in line with market expectations. Economic growth, which slowed last year, has picked up – with year-on-year GDP expansion of 5.7% recorded in February.

Dutch bank Rabobank has agreed to buy 100% of Chilean HNS Banco in a deal estimated to be worth around $50 million. The Chilean bank, which specializes in financing the local agri-industry, will become part of Rabobank Chile. The transaction is due to close end-April subject to regulatory approval.

Fitch Ratings has upgraded the foreign currency ratings of Chilean air carrier LAN Airlines to BBB from BBB minus. The outlook is stable. The rating action reflects continued improvement in operating results and credit protection measures from higher revenue in both passenger and cargo businesses and non-fuel cost reductions, said Fitch. Moreover, the Agency expects the incorporation of a new low-cost business model for domestic and short-haul regional routes should drive “strong margin improvement over the next several quarters”.