News
Date: 10/Mar/2008
Minister of Finance states that issuance of debt instruments in pesos allows to go on supporting exporters
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Andrés Velasco spoke about the Chilean government s unprecedented placing, in the local market, and as of March 26, a 30-year term debt instrument in Chilean pesos for US$ 1,200 million, through a monthly bidding process until December 2008.
The Minister of Finance, Andrés Velasco, spoke today about the government’s announcement to place a 30-year tem bond in the local market, in line with market demands and the prevailing trend in developed countries on this matter.
“We are doing this because we wish to prevent the liquidation of dollars and finance
public expenditure through debt instruments, exactly where no pesos are generated by other sources of income. This will allow us to support exporters, competitiveness and start to develop the debt market in Chilean pesos”, Velasco said, explaining that this issuance was authorized by Congress during the review of the 2008 Budget.
As of March 26, and until December of this year, the Government of Chile will call a monthly bidding process for bonds in pesos, legal tender, in the local market, for US$ 1,200 million.
“There had never been a 30-yeat term placement. This shows that we have an ever deeper, more mature, more liquid financial system, as well as a very credible government within the financial market. Very few countries may issue a 30-year term bond at reasonable interest rates”, Velasco reiterated.
As had been previously informed, the issues include Treasury Bonds: i) in pesos, legal tender, at a 10-year term (BTP-10) for a total amount of Ch
$ 200,000 million; ii) in unidades de fomento at a 20-year term (BTU-20) for a total amount of
10.2 million in UF; and iii) in unidades de fomento, at a 30-year term (BTU-30), for a total amount of
10.2 million UF.
On answering whether this would be one more measure intended to mitigate the effects of the lowered US dollar
exchange rate, the minister of finance pointed out that the government’s permanent position is to “take different measures and implement different instruments to help competitiveness”.
