La Araucana Bonds Price Tight

Chile-based financial institution Caja de Compensacion La Araucana has issued CLP10bn ($21m) in local 5-year bonds via a Dutch auction. The notes have a coupon of 7.00% and priced at 100.39 to yield 6.90%. They have a spread of 116bp over the BCP benchmark, tighter than the 120bp-140bp spread expected by one banker off the deal. Bankers on the deal say the company might seek another bond issue of the same size as demand for this week’s trade was 2x twice the amount offered. Proceeds of the A rated bonds will be used to refinance debt and to offer credit to clients. Itau Chile managed the sale.