Chile Launches 2-Part Global Bond Deal,Entering Market After 6 Yrs

29th Jul 2010 18:52

NEW YORK (Dow Jones)--Chile launched a two-part global bond deal Thursday in its first entry into international capital markets in six years. Chile launched $1 billion in 10-year dollar-denominated bonds at 90 basis points over Treasurys. It also launched about $520 million of 10-year peso-denominated bonds at 5.5%, according to a person close to the deal. It hasn't sold debt to global markets since 2004. Pricing is expected later Thursday. J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C) and HSBC Holdings PLC (HBC, 0005.HK, HSBA.LN) are managing the transaction. The government has said it will use the proceeds from the sale to finance reconstruction after February's powerful earthquake. Finance Minister Felipe Larrain also recently told reporters that the government is keen on raising the profile of the Chilean peso in international markets. Chile is among the most stable Latin American markets, and last month, Moody's upgraded its credit rating to Aa3 from A1 with a stable outlook, the highest in Latin America. Fitch Ratings affirmed Chile's issuer rating at A in May, while Standard & Poor's rates Chile A+. The top ratings agencies have touted its macroeconomic policies thanks to commodity-led budget surpluses and rate cuts during the financial crisis. That has also allowed the Central Bank of Chile to begin normalizing interest rates recently, even as most of the world keeps borrowing rates at historic lows. Chile's risk premium on the benchmark index, J.P. Morgan's Emerging Markets Bond Index Global, was at 1.31 percentage points over U.S. Treasurys on Thursday. -By Riva Froymovich, Dow Jones Newswires; 212-416-2217; [email protected] (END) Dow Jones Newswires July 29, 2010 13:52 ET (17:52 GMT)