Category: Chile

Antofagasta Minerals, part of the Chilean copper mining concern Antofagasta, is to set up a joint venture with South Africa’s AngloGold Ashanti – one of the world’s largest gold producers – to explore and develop copper and gold deposits in Colombia. The Southern Colombia Joint Venture, as it will be called, will see Antofagasta invest up to $8 million in exploration over four years to earn a 50% interest in the joint venture.

Family-controlled Chilean bank Banco de Credito e Inversiones (BCI), has sold bonds worth $33.3 million. The local inflation-linked bonds, totaling UF1 million, carry a coupon rate of 3.83% and have a maturity of 3.45 years. BCI, Chile’s fourth-largest bank, plans to use the money raised to fund expansion plans in the local market and increase the bank’s efficiency. The deal was managed by BCI’s subsidiary BCI Corredores de Bolsa.

Part of Chile’s plan to improve its competitiveness will see local companies allowed to issue peso debt abroad, as well as enabling foreign corporate issuers to launch debt securities in Chilean pesos. Chile’s finance minister, Andrés Velasco, has outlined a 15-point plan to make the country’s economy more competitive. The plan, which includes measures to reduce payments for corporate tax laggards and reduce stamp duties also aims to modernize and deepen financial markets and increase their integration with international markets, hence the change in regulations concerning corporate issuers.

Chile’s foreign trade reached $42.4 billion in the first half of the year, a rise of 31% compared with the same period in 2005. Exports increased by 39%, while imports rose by only 19%. Chile’s trade surplus was $9.2 billion for the first six months of the year. Trade with Europe and Asia grew by 36% and 26%, respectively; with the rest of the Americas it expanded by 29%. The country’s largest trade partners are Italy (58%), the Netherlands (51%), South Korea (43%) and the United States (33%).

Chile’s president, Michelle Bachelet has shuffled her cabinet just four months after appointing the new government. Bachelet has suffered from a sharp drop in opinion polls following student protests in May and recent floods, attracting heavy criticism of her education minister and interior minister. Alejandro Ferreiro takes over from Ingrid Antonijevic as head of the economy ministry; Belisario Velasco replaces interior minister Andrés Zaldívar; and Yasna Provoste becomes the new education minister, replacing Martín Zilic. Ferreiro, a lawyer with extensive experience in the area of regulation, headed up Chile’s securities regulator until earlier this year. Velasco brings the experience of having served in two previous administrations as deputy interior minister under presidents Patricio Aylwin and Eduardo Frei. Provoste also has ministerial experience and is seen as a safe pair of hands.

Chile’s Central Bank has raised the benchmark overnight lending rate a quarter of a percentage point to 5.25%. Economic growth of 6.1% and inflation ending June at 3.9% prompted the Bank to raise the rate, in line with market expectations. This is the first time the Bank has raised the rate since April, when it was lifted by 25 basis points to 5%.

Chilean retail group Centros Comerciales Sudamericanos (Cencosud) has agreed to pay $60 million for local supermarket chain Supermercados Economax, owned by the Montrone family. The company has a dozen stores in the metropolitan area of the capital, Santiago, and expects sales of around $142 million this year. Cencosud is one of Chile’s largest retailers and also has a presence in Argentina.

Electricity distributor EMEL, controlled by US company PPL Global, has sold $100.7 million worth of local inflation-linked bonds (UF3 million) in two series. Series D bonds, which have a maturity of 21 years were sold to yield 4.64% and the five-year Series C bonds to yield 4.07%.

Holding company AntarChile was due to sell up to $77 million worth of inflation-linked bonds in the local market yesterday, Wednesday. The bonds are due to mature in 2009. AntarChile, which controls industrial group Colpec, is part of Chilean industrial conglomerate Grupo Angelini, which paid almost $223 million for a 9.5% stake of local power company Colbún from Suez Energy Andino in May this year.

Chile’s Banco Bice is to issue $169 million worth of local bonds (UF5 million). The inflation-linked bonds mature in 2009 and will be issued in two series – 43 and 44 – carrying interest rates of 4.0% and 4.25% respectively. The bonds have been given a AA rating by Fitch Chile.