Year: 2021

Winner: Interchile $1.2 billion 2056 Green Notes

What better way to mark a company’s debut in the global capital markets than by issuing a bond that wins the most hotly contested category in this year’s Deals of the Year Awards?

This is precisely what Chile’s Interchile achieved with $1.2 billion worth of senior secured green notes that earned the company the award for ESG Deal of the Year, standing out in a strong field of contenders.

The green project bond, due in 2056, traded with a 4.5% coupon and is the largest such security to be issued out of Latin America. According to Scotiabank, which acted as global coordinator and joint bookrunner, the coupon is the lowest ever for a transmission company project bond.

“This deal is set to be a reference for green project bonds in Latin America,” Aquiles Vargas Fuenzalida, Interchile’s finance director, tells LatinFinance.

The company opted for a sustainable bond because the approach squared well with its main activity: Interchile is a key clog in Chile’s ambitious decarbonization plans as it helps to connect the production of renewable energy companies to the electricity grid.

“The green aspect is the main argument that we have to finance and refinance our operations,” Vargas says. “Despite the size of the bond, it was twice oversubscribed. And by being a green bond, many investors showed interest because it matched their sustainable strategies.”

Vargas and his team presented the deal to investors in New York, Singapore and elsewhere with a focus on its sustainable commitments. The company pledged to use proceeds to finance existing and future projects that provide infrastructure for the transmission and distribution of renewable energy.

Interchile successfully argued, for example, that its transmission lines help to boost investments in sustainable energy in the north of Chile, where several solar and wind power plants are being developed.

“It was the argument that green investors demanded to learn more details about,” Vargas says. “The fact that the bond was green enabled us to take our roadshow to a large number of sustainable investors. It helped to create more demand for our bond.”- LF