This issue is part of the Treasury's local currency bond placement plan for 2024. According to what was reported in January of this year, the total issuance plan includes US$16.5 billion, of which 71 have already been issued. %, with use of debt margin.
The Ministry of Finance of Chile completed on Tuesday the 30th the placement of two sovereign bonds in pesos, through the issuance of an instrument maturing in October 2029, for $1,300,000 million, and the reopening of a social bond maturing in April 2033, for $800,000 million (equivalent to a total of US$ 2,200 million, together).
The operation was carried out through the book-building modality with simultaneous offer in local and international markets, and settlement via Euroclear for international investors.
The operation received a total demand, coming from 55 accounts of local and international investors, reaching a maximum demand of US$ 7,000 million, that is, 3.2 times the amount awarded.
As a result of the high interest expressed in the order book, the final rate was able to be adjusted from the initially proposed price ("IPT"), until reaching a rate of 6.0% for the new BTP-2029 and 6, 20% for BTP-2033, that is, a reduction or compression of 20 basis points with respect to the initial figure, which implied a concession of 15 and 10 basis points in relation to the estimated value in the secondary market, respectively.
The award was mainly to local investors.
In turn, this operation reaffirmed the commitment to the social, environmental and governance (ESG) field, by including the reopening of the social bond in pesos maturing in 2033.
After this issuance, the participation of bonds with an ESG denomination in the total stock would be 38%.
In this regard, the Minister of Finance, Mario Marcel, highlighted that "having obtained a demand of more than 3 times what was offered demonstrates the appetite of local investors for the fixed income market and the rate shows confidence in State instruments." .
Likewise, he added, "we are again innovating by launching an issue with ESG standards, in accordance with our commitment to ensure that, in the medium term, between 40% and 50% of the debt have this rating."
This issue is part of the Treasury's local currency bond placement plan for 2024. According to what was reported in January of this year, the total issuance plan includes US$16.5 billion, of which 71 have already been issued. %, with use of debt margin.
Award details
The awarding of the new BTP-2029 bond and the reopening of the BTP-2033 social bond was carried out through an over-the-counter (OTC) book-building process, in which both local and international investors participated. simultaneously, in accordance with rules 144A (“Rule 144A”) and regulation S (“Regulation S”), issued under the United States Securities Market Act.
The portion allocated to foreign investors will initially be maintained in the account of Euroclear Bank SA/NV in the Central Securities Depository, and may be traded on said platform.
The coordinating banks of the operation were Santander, Citigroup and Banco Itaú; In addition, international legal advice was provided by the A&O Shearman firm and, at a local level, by the Morales & Besa firm.
