As part of the financing plan for 2025, the Ministry of Finance began this Tuesday its debt plan through the issuance of foreign currency denominated   in the international markets. The operation consisted of the issuance of a 7 year, euro denominated bond, for €1.7 billion, at a rate of 3.806%, followed by a 12 year usd denominated for US$1.6 billion, at a rate of 5.739%. 

The operation attracted high interest from global fixed income investors, obtaining a demand for the bond in euros close to €7.0 billion, equivalent to 4.1 times the offered amount, distributed in more than 280 orders. This allowed the Government to achieve an issuance rate below the estimated in the secondary market. In effect, the operation was announced with an initial price thought that implied  a spread of 175 bp (basis points)over the reference (mid-swap). The high demand allowed to reduce it up to 140 bp. Thus, the final price resulted in a negative concession of -5 bp with respect to the estimated price in the secondary market.

On the other hand, the dollar operation was announced with an initial reference that implied a spread of 137.5 bp over the US Treasury rate. The demand for this bond reached 4.3 times the amount allocated, in more than 300 orders, which allowed the spread to be reduced to 105 bp. The final spread implied a zero concession with respect to the estimated price in the secondary market, which reaffirms the success of the transaction and the interest in Chilean sovereign bonds.

In this regard, the Minister of Finance, Mario Marcel, pointed out that "this first issuance of the year has given us good news. The high demand reflects the sustained interest of foreign investors, explained by  a solid economy, which allowed us to achieve zero premiums or even negative. This assessment reinforces the evaluations of the rating agencies - such as S&P and Moody's - that highlighted the stability of the local economy and the prudent management of public finances."

This operation is aligned with the Ministry of Finance's strategy of creating benchmarks in the local and international markets, providing references for other issuers. In addition, it should be noted that the issuance in euros was carried out under the “Social” format, which reaffirms the commitment to the country's sustainability objectives. After this issuance, the total of bonds under some denomination related to the environment, social objectives or governance (ESG) reaches 40% of the total debt stock.

The bonds were issued under New York law and were registered before the Securities and Exchange Commission for which the shelf-registration was used.

The issue was carried out by the team of the Public Debt Office of the Ministry of Finance with the participation of the underwriters banks -HSBC, JPM, Citi and BNP, and the international legal advice of Shearman & Sterling and the local legal advice from Morales and Besa.