Chile

Chile turned to international investors for the fifth time this year on Wednesday — and the first time in local currency — to sell over $2bn-equivalent of social bonds, with foreign buyers taking nearly half the deal.

Glarner Kantonalbank dipped into the tier two market this week to raise an index eligible bond that may fund the redemption of the additional tier one (AT1) the bank rolled over in December due to coronavirus volatility. GLKB was joined on screens by a flurry of financial activity out of Chile.

A trio of foreign banks tapped an attractive Swiss market this week, finding opportunities to top up their well-advanced funding programmes with a bit of pricing arbitrage.

Santander Chile sold its first public international bond in over a year on Tuesday, turning to the Swiss franc market and pricing well inside its domestic curve as the local market loses its lustre.

Sell-side bankers say there could be up to 12 new issues from emerging market issuers this week as borrowers look to capitalise on extremely strong market conditions ahead of expectations that the Federal Reserve will cut its bond buying later in the year. Inversiones Latin America Power, one of the largest wind generation companies in Chile, was one of four LatAm companies to announce deal plans on Monday.

Chile, Peru and Colombia — previously hailed by EM investors for orthodox economic policymaking — are under pressure amid social unrest and political polarisation. But as the upheaval whirls around them, their credit in the bank with bondholders, after years of impressive debt management, is a major asset.

After Chileans chose the delegates who will draft a new constitution, bond market participants appeared to be taken aback by the centre-right government’s poor performance. Chilean assets across the board slumped, with local rates hit harder than hard currency bonds.

Banco Santander Chile has promoted from within to replace its departing head of corporate and investment banking (CIB).

Chile raised $2bn in dollar markets on its fourth international bond market outing of the year on Tuesday, achieving slim new issue concessions even as volatility in domestic markets is leading the sovereign to lean more heavily on external funding sources.

The Republic of Chile, until recently a rare issuer in international bond markets, sold its fourth cross-border bond of 2021 on Tuesday, becoming the fourth Latin America sovereign of the year to take advantage of a more liquid 20 year US Treasury to price a benchmark at that maturity.

Chilean miner CAP and Mexican car parts supplier Metalsa on Thursday became the latest in a string of Latin American companies to price dollar bonds not only at the tight end of guidance, but inside the indicated range, as bankers say investors are being coy with bookrunners about their pricing expectations.

Latin American oil and gas company GeoPark priced a reopening of its 2027 bonds with a negative new issue concession on Tuesday, taking advantage of strong demand from holders of its old notes to raise $150m.