BEST SOVEREIGN ISSUER
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
"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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