Wednesday, july 21, 2021

Chile issues Treasury bonds for €1.75 billion in foreign currency

The Ministry of Finance issued euro-denominated Treasury bonds for a total of EUR1.75 billion, as part of the Central Government’s 2021 additional financing plan. 

This operation reaffirms Chile’s leadership in sustainable finance, reflected by thematic bond issuances. Chile is the only country in the Americas that has issued green bonds since 2019, social bonds since 2020, and sustainable bonds since 2021. Considering today’s issuance, Chile has issued a total of approximately US$20 billion in labelled bonds, of which US$ 10.8 billion are social, US$7.7 billion are green, and US$1.5 billion are sustainable. Labelled bonds represent roughly 20.2% of the total stock of Central Government debt. 

Considering this issuance, Chile has issued bonds for a total of US$15,765 million this year, of which US$9.9 billion are denominated in foreign currency. Today’s operation is the second euro-denominated issuance this year, after the operation in January 2021. 

The issuance of the new social bonds is in line with the measures that the Ministry of Finance has taken to diversify the investor base in recent years. Other measures include adjustments that allowed for the direct participation of international investors in peso denominated issuances, the issuance of green bonds –which targeted investors with ESG mandates-, and the issuance of Formosa Bonds, listed in the Taipei Stock Exchange, in March 2021.

Results of the Transaction.

The transaction included the issuance of two new euro-denominated Treasury bonds for a total of €1.75 billion, maturing in 2027 and 2036. These issuances reached a demand of approximately €4.5 billion, 2.6 times the allocated amount. Additional details of the euro bonds are described below:

•    New social bond maturing in 2027 for €1 billion at a yield of 0.296% (coupon of 0.1%), 60 basis points above the respective mid-swap rate. The spread was equivalent to a 7 basis points concession (NIC). This bond establishes a new five-year benchmark reference. This is the lowest coupon ever achieved by an issuer in Latin America.

•    New social bond maturing in 2036 for €750 million at a yield of 1.31% (coupon of 1.3%), 110 basis points above the respective mid-swap rate. The spread is equivalent to a 15 basis points concession (NIC).

The bonds issued are “social”, according to the definition included in the Republic of Chile’s Sustainable Bond Framework, published by the Ministry of Finance earlier this month. The Framework established the guidelines to issue green, social and sustainable bonds, according to ICMA standards. According to the Framework, resources collected in this issuance will finance projects that support households, education, essential health services as well as programs to prevent and/or alleviate the effects derived from COVID-19, among others.

The bonds were issued under the New York law and were registered under the U.S. Securities and Exchange Commission (SEC) using the shelf-registration normally used by the Republic of Chile.

The issuance was executed by the Ministry of Finance’s team, underwriter banks (BNP Paribas, CITI, Goldman Sachs, JPMorgan, Santander, y Scotiabank), and the international legal counsel of Linklaters and national legal counsel of Morales y Besa.


Tamaño de letra

Otros accesos

Ministry of
  • Where we work
  • Teatinos 120, Santiago de Chile
  • Call us
  • +56 2 2828 2000

© 2020 Ministry of Finance

Versión en español