Chile

Having sold €1.75bn ($2.1bn) of social bonds in euros on Wednesday, Chile returned to the dollar market for the fourth time this year on Thursday to print $3.75bn of social bonds across three tranches — the week after it had increased its 2021 funding needs by $8bn.

Long dated issuance returned to EM primary bond markets in force this week as DCM bankers said issuers were seeing the latest fall in US Treasury yields as a sign that they should accelerate funding plans. Although several investors remain cautious on the prospects for rates markets, the weight of cash to be put to work is set to keep funding conditions attractive for EM borrowers, writes Mariam Meskin and Oliver West.

Chile began chipping away on Wednesday at the bumper funding needs it announced last week, raising €1.75bn ($2.1bn) in social bonds in the euro market as investors said the government, which still has the lowest debt to GDP ratio in Latin America, has space to print more.

Chilean electricity transmission company Interchile sold its first international bond on Monday, braving difficult market conditions to raise $1.2bn of green bonds.

Chile’s head of international finance told GlobalCapital this week that the country was likely to tap euro and dollar bond markets again this year after it increased its 2021 funding needs by $8bn.

Interchile, the Chilean electricity transmission company owned by Colombian government-controlled conglomerate ISA, began investor calls on Tuesday ahead of a potential green bond issue.

The Bank of Nova Scotia’s Chilean subsidiary turned to the Swiss franc for its debut international bond sale on Tuesday, achieving a cost of funding well inside what it could have achieved in the domestic market.

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.