Parque Arauco has put aside intentions to sell a bond
internationally for the moment, given less favorable
conditions, and will look at the local market to raise debt,
LatinFinance has heard.
A worsening in the swap rate makes a issuing a
dollar-denominated bond less attractive than earlier in the
year, when Parque Arauco told LatinFinance it was
considering such a move. Between base rates, spreads and
swaps, it makes more sense to issue locally in Chile, the
company told LatinFinance.
Most of the revenue for Parque Arauco, which develops and
operates shopping malls, is in local currency in Chile, Peru
and Colombia, Juan Antonio Álvarez, the
company’s chief executive, said: "Either with
swaps or issuing in local currency, we want at least most of
the debt to be hedged with our revenue," Álvarez told
|| Source: dbravosilva
The Chilean firm is considering issuing a bond in the local
market within the next 12 months to finance expansion in
Chile, Peru and Colombia in the coming years: "We want to
combine an aggressive and ambitious growth strategy with a
sound and conservative financial strategy," he says.
He points in particular to Peru, which the firm entered in
2006, and to Colombia, which it entered in 2008. "The markets
in these countries are growing fast, and are still
underpenetrated compared to developed markets," he
Meanwhile, Parque Arauco expects to use $200m-equivalent from
a capital increase in the first quarter of this year to
continue expanding. The company issued 127.8m shares, selling
115m, with the rest set aside for stock options.
Some 28% of Parque Arauco is held by foreign investors, a
figure that Álvarez says has increased in recent
years. Meanwhile, Chilean pension funds also nearly doubled
their participation in the firm from 4% to just over 8% of
the firm's total stock over the last year, according to
"We are the only possible vehicle for foreign investors to
invest in commercial real estate in the Andean region," he
said. "We are, we believe, a very attractive company. We show
quite good performance consistently, and we expect to
continue doing so."