Chile sold €1.75 billion ($2.06 billion) worth of social bonds in a two-part deal on Wednesday as part of the government’s 2021 additional financing plan, the Finance Ministry said in a statement.
The ministry said it set a new five-year benchmark with €1 billion in 2027 bonds and also placed €750 million in 2036 bonds to raise funding for education and healthcare programs as well as efforts to recover from the COVID-19 pandemic.
The 2027 bonds carried a coupon of 0.1% and priced to yield 0.296%, or 60 basis points above mid-swaps, while the 2036 bonds came with a coupon of 1.3% and priced to yield 1.31%, or 110 basis points over mid-swaps, the ministry said.
“This is the lowest coupon ever achieved by an issuer in Latin America,” the ministry said of the pricing for the 2027 bonds.
The ministry also said it offered a new issue concession of seven basis points for the 2027 bonds and 15 basis points for the 2036 notes.
BNP Paribas, Citi, Goldman Sachs, JPMorgan, Santander and Scotiabank were the underwriters, while Linklaters was the international legal adviser to Chile and Morales y Besa was the local legal adviser.
Chile has now issued roughly $20 billion in environmental, social, and governance (ESG) bonds since 2019, including $10.8 billion in social bonds, $7.7 billion in green bonds and $1.5 billion in sustainable bonds. The so-called labelled bonds now represent 20.2% of the government’s debt, the ministry said.
It carried out a $2 billion ESG bond sale in May this year, printing $1.7 billion in 3.1% 2041 bonds and adding $300 million to its 2.45% 2031 bonds. It placed $1.5 billion worth of 32-year sustainability bonds at 3.5% in the Taiwanese market in March and sold $4.25 million worth of green and social bonds in dollars and euros in January.
Chile has raised $15.8 million in the bond market this year, including $9.9 billion in foreign currency.