Chile

The world’s largest copper producer, Codelco, returned to bond markets on Tuesday with a well received $2bn dual tranche as predictions that Chilean issuers would be very active in January begin to look very accurate.

State-owned lender Banco del Estado de Chile (Banco Estado) kicked off what could be a busy January for Chilean issuance with a $750m five year senior unsecured deal on Monday.

Chile’s head of international finance has told GlobalCapital that the debt management office is making communication with investors its number one priority as it announced borrowing plans — including an atypically large amount of international issuance — earlier than usual after a turbulent fourth quarter.

Latin American bond bankers are reporting busy January pipelines as issuers look to take advantage of low rates before the US election season hits next year.

Chilean mobile phone operator WOM approached bond markets for the first time on Thursday seeking $450m of senior unsecured notes to refinance its existing capital structure and complete a dividend recap.

The only two corporate issuers from Latin America this week sailed through primary markets as bankers said low rates and technical factors would continue to override socio-political volatility and sluggish economies in the region.

State Grid Corporation of China is seeking a loan to support its $2.23bn acquisition of Sempra Energy’s Chilean business. Even though it is a time of turmoil in Chile, lenders are bidding aggressively for the deal, owing to the state-owned Chinese company’s strong credentials, writes Pan Yue.

Chilean power company Empresa Eléctrica Cochrane sold $430m of 7.5 year amortising notes on Wednesday as part of a bond and loan refinancing of project finance debt.

State Grid Corporation of China is in talks with banks for a loan to support its $2.23bn acquisition of Sempra Energy’s Chilean business.

Bankers and market analysts said there was no sign bond markets were seriously concerned about continued social unrest in Chile, as pulp and wood panel producer Celulosa Arauco y Constitución eased its way to a $1bn dual tranche new issue this week.

Celulosa Arauco y Constitución, the Chilean pulp and wood panel producer, is looking to issue what it describes as a “sustainability” bond, as Chile’s focus on environmental topics spreads to the corporate world.

The Inter-American Development Bank has published a report promoting the use of covered bonds as a funding tool for green developments in Latin America and the Caribbean. But it remains to be seen whether risk-averse covered bond investors are ready to take the plunge into emerging markets — particularly given regulatory hurdles in the swaps market.