Category: Chile

Pampa Calichera, a holding company based in Chile, sold $250 million in 7.75% bonds (BB-) Friday morning. Orders for the 15-year bonds (13-year average) came in at close to $500 million and they were priced at par at a spread of 295.3 basis points over 10-year Treasuries. The 2022 bonds amortize 20% every year beginning in 2018, and include a make whole of Treasuries plus 50 basis points. Deutsche Bank had sole books.

Chile’s Central Bank elected to keep the benchmark lending rate unchanged at 5% at its monthly monetary policy meeting on Thursday. In a statement, the Bank said that the external situation relevant to Chile remained favorable and international financial markets continued to offer benefits. Meantime, the domestic economy recovered some of its dynamism in the final quarter of last year and inflation was generally in line with expectations. Last month, the Bank raised its overnight lending rate by a quarter of a percentage points, taking analysts by surprise.

Pampa Calichera, an investment company based in Chile, is expected to price $250 million in 15-year bonds (BB-) this morning (February 9). Price talk is in the high 7% range and the book was at least two times oversubscribed, with dedicated emerging market and local investor participation cited. The notes are secured by $500 million worth of shares. As a non-investment grade dollar issuance from Chile, the deal is on the rarer side. The only other similarly structured offering from Latin America in recent memory is Brazil’s ISA, a utility holding company which priced at 8.80% last week.

Chile’s state-run copper mining company Codelco is to be restructured if a bill sent to Congress in March is approved. Chile’s finance ministry outlined the changes in store for the state entity which, it says, will bring greater transparency and management efficiency. One important change is that board members need no longer be ministers. Of the seven board members, who will all serve a three-year term, four will be appointed directly by the President. Two independent members will be appointed by another government department. One seat will remain for a workers’ representative.

Santander Santiago, Chile’s largest private bank, is to offer local inflation-linked bonds worth $469 million (UF14 million), issued in five series. The first, Series O, will have a four-year maturity, total UF5 million, and pay an annual interest rate of 3.30%. Series P (UF3 million) is for seven years, at an annual rate of 3.5%. Series Q (UF2 million) is for nine years at an annual rate of 3.7%. Series R (UF2 million) carries a 20-year maturity at an annual rate of 3.9% and Series S is for UF2 million for 30 years at an annual rate of 4.1%. The bonds have been rated AA+ by Feller Rate.

Chile’s annual inflation rose 2.8% in January, from 2.6% in the 12 months through December, according to INE, the national statistics institute. On a monthly basis, inflation was up from 0.1% in December to 0.3% in January, driven by housing and transport costs, which rose by 1.0% and 0.9% respectively.

Chilean investment company Sociedad de Inversiones Pampa Calichera is preparing to issue $250 million in bonds with a 15 year final maturity. The deal amortizes over its last five years, giving it an average life of 13 years. Sole lead is Deutsche Bank and pricing is expected Thursday or Friday. A roadshow is planned for London February 6 and New York February 7-8. The rating is BB-.

Chilean electricity company Nueva Transelec has named Andrés Kuhlmann its new chief executive, effective March 1. Kuhlmann comes from running Siemens Chile, and prior to that was managing director of Electroandina. He has also worked at Peruvian electricity generator EDEGEL. Kuhlmann will replace Eduardo Andrade Hours, who has been interim chief executive since December following the resignation of Jean-Guy René. Transelec is owned by Canadian investment fund Brookfield, which bought the company last June.

Scotiabank Sud Americano, the Chilean subsidiary of the Bank of Nova Scotia, issued local inflation-linked bonds for the first time, selling $168 million worth of the securities on Wednesday, more than the $50 million originally planned. The bonds, which carry a maturity of 9.5 years and a duration of 8.16 years, will pay interest of 3.61% over the UF rate, equivalent to a spread of 83bp over 10-year Central Bank notes. The paper has been assigned an AA minus rating by Fitch.

Chilean lending and social security fund Caja de Compensación de los Andes announced Monday it had sold $111 million worth of local inflation-linked bonds last week. The 10-year notes were sold via Banchile at an annual yield of 6.08%. The money raised will go towards refinancing debt and to expand the loans portfolio. The senior notes carry an A rating from Feller Rate.