JPM Issues Long Chilean Benchmark

JPMorgan Chase has set a benchmark in Chile with a $103m equivalent issue of peso-denominated bonds. The transaction is the longest-dated straight peso-denominated corporate bond so far in the local market, according to Cristian Letelier, a banker at IM Trust, one of the two underwriters. The 2017 zero coupon bonds priced at 53.40 of face value and pay an implicit yield 6.48% throughout their life. The face value of the deal is the Chilean peso equivalent of $193m. The notes priced Tuesday at 52bp over the 10-year BTP bond issued by the government. Corporate deals in UF, inflation-linked units, are more common in the Chilean market and typically run to around 20 years in duration. Until this week, JPMorgan’s Chilean subsidiary has funded itself solely from its parent. The idea behind the issuance is to diversify its sources of funding, says Letelier. LarrainVial was the other bookrunner on the deal.