Chile is tapping global markets for this second time this week as it seeks to exchange yet more outstanding notes for newly issued euro-denominated sustainability-linked bonds.
(Bloomberg) — Chile is tapping global markets for this second time this week as it seeks to exchange yet more outstanding notes for newly issued euro-denominated sustainability-linked bonds.
The South American nation sold 750 million euros of notes due in 2034, at a spread of 128 basis points over midswaps, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak on the record. Initial price talk had been 155 basis points.
The government is also offering to exchange 4.95 billion euros of existing euro bonds, consisting of four notes with maturities in 2025, 2026, 2029 and 2030, according to a Wednesday statement. Chile intends to keep the offer open for at least five business days.
Wednesday’s announcement is yet another sign that Chile, which became the first country in the world to sell sustainability-linked bonds in 2022, is looking to keep building its reputation in the fast-growing ESG debt market. The sale came one day after the country sold a total of $2.25 billion of dollar notes due in 2036 and 2054, and opened a swap for existing non-ESG bonds due between 2025 and 2047.
Chile is tapping global markets for ESG bonds because the domestic market isn’t yet ready for the issue of sustainability-linked securities, Finance Minister Mario Marcel said in an interview in New York.
“The largest challenge that we have right now is that given that we are trying to increase the share of green bonds, or ESG-related bonds, that market is not that developed domestically,” said Marcel. “We have to go more to foreign markets.”
Chile hopes to engage the local-currency market in a few years once the sustainability structure is more developed domestically, he added.
Read: Chile’s Finance Chief Says New Tax Reform Proposal Is ‘On Track’
The bookrunners for the new issuance are Credit Agricole CIB, HSBC, Santander, Scotiabank and Societe Generale.
–With assistance from Carolina Gonzalez.
(Updates pricing on the bonds.)
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