BEST SOVEREIGN ISSUER
Jan 1, 2011
A $1.5 billion dual-currency bond issue in July 2010 of dollar denominated and global-local notes marked the re-emergence of Chile, a historically infrequent issuer, and set a benchmark for its corporates.
Levels achieved were lower than market participants anticipated, demonstrating the leverage the sovereign had on price, despite damage from an earthquake and external markets turmoil.
While investors like the credit, the sovereign has an illiquid curve. With the cost of the earthquake as impetus, Chile came to the market as part of its fund raising which also includes privatizations to help cover the $8.4 billion cost of rebuilding from Februarys earthquake.
"With this transaction we were able to reduce the long-term rate and the cost of borrowing for the state, which will also benefit Chilean companies so that they can issue in pesos," finance minister Felipe Larrain tells LatinFinance.
It was the first dollar bond offering from Chile since 2004 and the first local currency global bond it has issued in the international debt capital markets. The bond issue was six times oversubscribed, with over...
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