Category: Chile

Campos Chilenos, the Chilean investment unit of UK company ED&F Man has announced it may sell up to 10% of local sugar producer Iansa. Campos Chilenos is Iansa’s largest shareholder, owning 45.13% of the company.

Chile’s economic growth slowed in April, with GDP expanding by only 2.8% year on year. Chile’s Central Bank said a slowdown in manufacturing and retail led to the drop in the pace of growth and may lead the Bank to hold back with increases in interest rates. Central bankers are scheduled to review rates on June 15. They last raised the benchmark rate in mid-April when they increased it by 25 basis points to 5%.

Chile’s largest bank, Banco Santander Santiago, has placed $205.7 million worth of inflation-linked local bonds, denominated in Unidades de Fomento. The 20-year bonds mature in 2026 and carry an interest rate of 4.57%.

Chile’s economy expanded by 5.1% in the first three months of the year compared with the same period in 2005, according to Central Bank figures. High export revenues from copper, the country’s main product, continued to drive GDP growth. The expansion comes after fourth-quarter growth of 5.8%. Last year Chile recorded its fastest rate in eight years, when it posted a 6.3% increase.

Chilean industrial conglomerate Grupo Angelini has paid almost $223 million for a 9.5% stake of local power company Colbún from Suez Energy Andino, the local subsidiary of the French group. Suez is selling its 19% share through JP Morgan and Larrain Vial. The acquisition, made through Angelini’s holding company AntarChile, gives Angelini the right to one seat on the board of directors.

Alberto Fujimori, former president of Peru, has been released on bail in Chile after almost seven months in jail. He is banned from leaving Chile on the order of the Supreme Court and is fighting extradition by Peru where he is wanted on charges of corruption and human rights abuses. Fujimori fled Peru in 2000 to exile in Japan. Last November he arrived in Chile stating that he was preparing to stand in Peru’s presidential elections this April but was arrested by Chilean authorities at the request of the Peruvian government. In January, Peru’s electoral court barred him from running in the elections.

Chile’s Central Bank has held the benchmark overnight lending rate at 5%, saying it did not see growing inflationary pressures. The bank conceded that headline inflation was in the upper half of the target range, but pointed out that underlying, core inflation lay in the center of the range. Last month the Bank raised the rate by quarter of a percentage point to curb inflation. Meanwhile, analysts pointed to slower-than-expected growth in the first quarter of the year.

Chile’s state-owned railway company, Empresa de Ferrocarriles del Estado (EFE), has issued $84 million worth of inflation-linked local bonds (UF2.4 million), maturing in 2036 and carrying an annual interest rate of 4.4%. The notes are part of the company’s Series T offering and are rated AAA. And local retailer Cencosud is to make its second debt offering this year when it sells up to $43 million worth of bonds on Friday. The bonds will mature in May 2011. Meanwhile, Electricity distributor EMEL, controlled by US company PPL Global, is to offer $211 million worth of bonds (UF6 million) in two series. One series offers maturity of 10 years, while the other matures in 30 years. The first tranches of the first series will be for up to $105 million worth of five-year bonds and for the second series up to the same amount of 21-year bonds.

Chile’s external debt rose from $44.9 billion at year-end 2005 to $45.4 billion at the end of the first quarter of this year, an increase of 1.17%. Most of the debt – 79% or $35.7 billion – was accounted for by the private sector. Around 84% of the total external debt is long term.

Chile’s trade surplus for the four months through April this year rose 50%, year-on-year, to $5.6 billion versus $3.9 billion in 2005. Exports for the period rose 26.2% to $16.2 billion, driven by the continuing high demand for copper, while imports were up only 16.3% to $10.7 billion.