Chile to sell euro-denominated sustainability-linked notes due 2034

By Mary-Katherine Stinson

Lexington, Ky., June 28 – The Republic of Chile is planning an offering of euro-denominated sustainability-linked notes due 2034, according to a 424B3 filing with the Securities and Exchange Commission.

The notes will feature an optional make-whole call until three months before maturity, followed by a par call option.

The bonds will be issued under Chile’s sustainability-linked bond framework adopted in 2022 and updated in 2023.

Under the note terms, Chile will make an additional single payment at maturity or redemption of 50 basis points of the then outstanding principal of the notes if either of the sustainability performance targets have not been satisfied, or 100 bps of the then outstanding principal if both sustainability performance targets are not satisfied.

The first sustainability performance target in connection with the notes is made up of two events: achieving annual greenhouse gas emissions of 95 metric tons of carbon dioxide equivalent by Dec. 31, 2030 and achieving a maximum greenhouse gas budget of 1,100 metric tons of carbon dioxide equivalent between Jan. 1, 2020 and Dec. 31, 2030. The second sustainability performance target requires that by Dec. 30, 2031 at least 40% of the boards of directors at reporting companies be comprised of women.

Credit Agricole CIB, HSBC Securities (USA) Inc., Banco Santander, SA, Bank of Nova Scotia, London Branch and Societe Generale are joint bookrunners.

Bank of New York Mellon is the trustee.

Linklaters LLP, special New York counsel to Chile, and Morales & Besa Abogados Ltda., special Chilean counsel to Chile, will advise the issuer.

Cleary Gottlieb Steen & Hamilton LLP (New York law) and Garrigues Chile Ltda. (Chilean law) are working on behalf of the bookrunners.

Proceeds will be used for general government purposes.

Application will be made for the notes to be admitted for trading to the international securities market of the London Stock Exchange.

The issue size of this offering may be increased dependent on the results of an exchange offer announced June 28. Chile plans to invite holders of approximately €4.95 billion of its outstanding euro-denominated debt securities maturing between 2025 and 2030 to tender their notes in exchange for additional notes which will be consolidated, form a single series, and be fully fungible with the newly issued euro notes.

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