Chile: Government’s international bonds issuances at favorable interest rates conditions

Today, the Ministry of Finance announced the success of two bond issuances in international markets. One of €800mn at an annual interest of 1.745% for 10 years, 75bp above Euro Swaps rates and with bid-to-covers around 3.75x. The second, a 10 years issuance of USD1,000mn with a spread of 90bp above 10Y US Treasury. The resources will probably be use to both capitalization of Codelco (the state-owned copper company) and the pre-payment of debt taking advantage of the still favorable interest rate conditions in international market. Finally, considering the most likely destination of the resources, we do not foresee exchange-rate effects related to this announce.

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