Friday, december 20, 2019

Ministry of Finance announces the Treasury Bond issuance plan for 2020

The Ministry of Finance will issue Treasury bonds for a maximum of approximately US$8.7 billion during 2020, in line with the debt limit authorized by the 2020 Budget Law.  

Of these US$8.7 billion, approximately US$5.4 billion will be issued in local currency denominated Treasury bonds, with the remaining US$3.3 billion to be issued in foreign currency denominated bonds.  

Regarding local currency issuances during 2020:

• Continuing our efforts to further develop liquid benchmarks across the yield curves, new benchmarks maturing in the years 2025 and 2039 will be created in Peso and UF (inflation-linked) curves. 

• In order to further improve the liquidity and depth of the domestic fixed income market, benchmark references created in 2019 maturing in 2030 and 2050 will also be reopened. 

The following table describes the 2020 issuance plan for local currency denominated Treasury bonds:


Note: BTPs are Treasury bonds denominated in Pesos

BTUs are Treasury inflation-linked bonds (UF denominated)

As has been the case in recent years, local currency denominated bonds will be issued by two mechanisms:

• Auctions for a total of US$3.4 billion through the SOMA system of the Central Bank of Chile, acting as Fiscal Agent of the Republic of Chile. These auctions will begin in March of 2020, subject to the timely approval of the required legal documentation. The annual calendar for auctions through the Central Bank will be announced in due time. 

• Issuance(s) for a total of US$2 billion allocated through a book-building process, in operations that will be duly informed before their execution. 

The Ministry of Finance will continue implementing liability management operations of local currency bonds throughout 2020, with details and calendar to be announced in the near future. 

Regarding foreign currency issuances during 2020:

Treasury bonds in foreign currency are planned to be issued for an amount equivalent of up to US$3.3 billion mostly under the “green” label, subject to market conditions, which will be duly informed before their execution. 

Finally, these plans may change in case of unforeseen changes in market conditions and/or adjustments in funding needs of the government. If this were to occur, it will be appropriately informed.


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