Chile

Even as sovereign restructuring and debt relief top the agenda for emerging markets bond buyers, investors are showing faith in the top names in the asset class. Tuesday was Chile’s turn; the sovereign breezed its way through two currencies, notching a negative new issue premium in dollars and becoming the first non-European sovereign to issue in euros since the Covid-19 crisis began.

The operator of Santiago de Chile’s metro system, Metro, found ample demand for a new dual tranche issue on Monday as investors continue to show appetite for highly rated government-related issuers even at tight new issue concessions. The borrower's state support means it is a in a strong position to do Latin America's first buy-back of the pandemic.

Empresa de Transporte de Pasajeros Metro (Metro) could become the second Chilean government-linked issuer to offer bonds in the international market in less than a week, as investors say that the corporate market is likely to remain the preserve of the best-rated issuers.

With Covid-19 measures expected to add $4bn to Chile’s debt issuance this year, the sovereign is still to define the source of another $4.5bn of funding, according to the country’s head of international finance.

Chilean government-owned copper miner Codelco said on Wednesday that it had sought to increase its cash position in the face of market uncertainty after wrapping a well oversubscribed return to bond markets.

With Covid-19 measures expected to add $4bn to Chile’s 2020 debt issuance, the sovereign is still to define the source of $4.5bn of funding for this year, according to the country’s head of international finance.

Even as yields in Latin America’s top-rated credits reach all-time lows amid a US Treasury rally, volatility will likely prove too tricky for most of the region’s issuers to navigate primary markets in the short term, said bankers.

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.