Chile

Chilean power generator Colbún saw its new 10 year bond rocket on the break as Latin American credit was driven tighter by a rally in global markets.

On the day that the yield on 10 year US Treasuries dipped below 1% for the first time ever, Chilean power generator Colbún batted away amid market volatility to not only reopen the Latin America new issue market but clinch the lowest coupon on its curve.

Chilean power generator Colbún will begin investor meetings on February 21 with the publication of full year financial reports set to trigger a second wave of new Latin American issuance for the year.

Though Latin America bond markets have so far dodged the brunt of global volatility related to Covid-19, the official name of the coronavirus outbreak, the region’s commodity dependence makes it particularly vulnerable to a China slowdown, say analysts.

Chilean mobile phone operator WOM took advantage of a better tone in bond markets on Tuesday to add $60m to its 2024 notes, first sold in November.

Chile completed its $3.3bn of external funding needs for the year in two days this week, tapping both euro and dollar markets for green bonds that EM accounts say are becoming increasingly important for their end investors.

The day after it sold €1.961bn of green bonds in the euro market, Chile jumped on borrower-friendly conditions in dollars to complete its higher than usual external funding needs for the year.

Investors said that Chile’s focus on green bonds should allow it to diversify its funding base as the sovereign shrugged off political uncertainty to clinch tight pricing on its return to euro markets on Tuesday.

The Republic of Chile has mandated banks to arrange its second euro green bond offering, as well as launching a tender offer of outstanding euro debt.

Chemicals company SQM became the latest Chilean firm to issue internationally on Thursday, as the country’s corporates continue to take advantage of high levels of liquidity to pre-fund ahead of a potentially volatile year.

One pricing and one roadshow announcement on Wednesday ensured that Chile continues to lead the way this year in terms of Latin American bond issuance.

Latin America’s rip-roaring start to the year took a slide down the credit curve on Tuesday with two high yield deals — to no discernible impact on investor appetite.