Ontario Eyes Local Bond for Chilean Deal

Ontario Teacher’s Pension Plan, the Canadian pension fund manager and private equity firm that last week acquired 49% of Chilean water utility Esval for $365m, will be financing part of the purchase by tapping the local debt market. A very likely possibility would include issuing a long local bond, say executives who have worked on similar deals. Ontario is looking to make long-dated investments in regulated entities, which include utilities and infrastructure. So far the fund has been restricted to Chile and Mexico, but it is heard to be eyeing Brazilian deals now too. “We like these companies for a number of reasons. They are regional monopolies with exclusive rights to operate in their geographic area, they provide stable low-risk returns, and they have a very long economic shelf life consistent with our long-term investment goals,” said Jim Leech, senior vp of Teachers Private Capital.