Category: Chile

Chilean BCI Securitizadora placed $35.3 million-worth of securitized notes in the local market yesterday, Wednesday. The bonds, which carry a maturity of 6.11 years, at a nominal annual rate of 6.36%, were priced at a spread of 51 basis points over seven-year central bank securities. The bonds are backed by loans originated by the Caja de Compensación La Araucana. The offering was 70% oversubscribed and was coordinated by BCI Corredor de Bolsa. The bonds have been rated AAA/C by Fitch Ratings and Feller-Rate.

Chile’s trade surplus in September reached just over $2 billion on the back of exports of $5.17 billion and imports of $3.12 billion. September’s figures take the trade surplus for the first nine months of the year to $17.2 billion. Exports for January through September totaled $43.6 billion – up 47.5% year on year, while imports rose to $26.4 billion – up 18.7%.

Chilean development bank Banco del Desarrollo has priced a two-tranche local deal for the equivalent of $85 million in UF, the domestic inflation-indexed unit. It included a $50 million-equivalent, five-year bullet at 376 basis points over UF, or 74 basis points over the Chilean T-bill. There was also a $35 million equivalent 25-year final, 13-year average subordinated piece at 465 basis points over UF (158 basis points over government). The latter had a 13-year grace period. Pricing compared favorably to the 220 basis points spread seen for the same issuer last year, said a banker on the deal. IM Trust was the lead.

Chilean state-run copper miner Codelco is planning to return to the international capital markets for the first time in more than a year to fund investment needed to boost output at its mines, which are currently running at or close to capacity, according to analysts. The company is set to issue $500 million of 30-year bonds later this month. Bookrunners for the deal are Deutsche Bank and HSBC.

Geneva-based investment bank International Capital Partners, part-owned by Credit Suisse, has opened a representative office in Santiago, Chile. ICP is also planning a representative office for São Paulo. The boutique bank specializes in corporate finance for small to mid-sized capital.

The continuing decline in fuel prices led to 0% inflation last month in Chile, according to the country’s national statistics institute (INE), down from monthly inflation of 0.3% in August. The annual rate fell to 2.8%, the lowest level seen since last June. Analysts predict the unchanged prices in September will prompt the central bank to hold the overnight benchmark interest rate steady for at least another month at 5.25%. Growth slowed in the second quarter to 4.5% from 5.3% in the first quarter.

Chilean financial holding company, Corp Group, which controls Chile’s Corp Banca, is to sell its Venezuela bank subsidiary, Corp Banca Venezuela. The unit is to be sold to the controller of Venezuela’s Banco Occidental de Descuento (BOD), although no deal figure has yet been revealed. Corp Group said the sale was part of its strategy to focus on the group’s core business in Chile.

More sober economic news from Chile shows a disappointing rise in industrial output in August of only 1.2%. This is well below what was forecast by many analysts. Rising energy costs have curbed investment plans by many companies and led to a slowdown in growth. The August rise is the slowest in four months.

Chile and Japan have signed a preliminary free trade agreement that allows for the reduction of tariffs in the automotive, agriculture and fisheries sectors. Japan is Chile’s largest trade partner after the US, accounting for exports worth $4.5 billion last year. Chile imports mainly vehicles, auto parts and electronics from Japan and exports copper, fish, pork and wine to the Asian nation. The agreement, due to be signed early next year, will guarantee Japan a steady supply of natural resources. Meanwhile, Colombia says talks with Chile regarding a free trade treaty between those two nations is progressing faster than expected and it hopes to sign an accord by the end of November.

Chilean Implementos Mineros (Implemin), Latin America’s leading drilling consumables producer for the mining industry, is to be acquired by Swedish industrial group Sandvik. Sandvik has not disclosed how much it has agreed to pay for the Santiago-based company but said the acquisition of Implemin would strengthen its offering for surface mineral exploration “by providing additional consumables and tools to the product range”.