Chile runs one-day capped tender offer for four note series on Tuesday

By Susanna Moon

Chicago, Jan. 12 – The Republic of Chile said it began a one-day tender offer for up to maximum amount of four series of its notes, with the purchase amount to be set later.

The tender offer began at 8 a.m. ET on Tuesday and was set to end at 4 p.m. ET the same day, with settlement following on Jan. 20.

The purchase price will be set using a reference security plus a fixed spread as follows:

• $829,467,000 of outstanding 3 7/8% global notes due 2020 will price using the 1.75% Treasury note due Dec. 31, 2020 plus 57 basis points;

• $656,027,000 of outstanding 3¼% global notes due 2021 will be based on the 1.75% Treasury note due Dec. 31, 2020 plus 88 bps;

• $750 million of outstanding 2¼% global notes due 2022 will be based on the 2.125% Treasury note due Nov. 15, 2025 plus 59 bps; and

• $1,060,131,000 of outstanding 3 1/8% global notes due 2025 will be based on the 2.125% Treasury note due Nov. 15, 2025 plus 91 bps.

The hypothetical purchase price for each $1,000 principal amount was set at $1,074.88 for the 3 7/8% notes, $1,042.17 for the 3¼% notes, $970.04 for the 2¼% notes and $1,005.38 for the 3 1/8% notes. The hypothetical price was calculated using the bid-side price of the reference U.S. Treasury security at 2 p.m. ET on Jan. 11.

The offer is not conditioned upon any minimum tender amount but is conditioned on the pricing of the new dollar-denominated notes.

Chile said it began an offering to issue a series of global notes due 2026 to be denominated in dollars as well as a concurrent offering for a series of global notes to be denominated in euros.

Proceeds of the dollar-denominated notes will be used to fund the tender offer, and proceeds of the euro notes sale will be for general purposes.

Pricing for the tender offer will be set using the bid-side price of the reference U.S. Treasury security or using the actual U.S. Treasury rate used to calculate the yield for the new notes, the release noted.

The dealer managers are Citigroup Global Markets Inc. (212 723-6106 or 800 658-3745), HSBC Securities (USA) Inc. (212 525-5552 or 888 HSBC-4LM), Merrill Lynch, Pierce, Fenner & Smith Inc. (646 855-8998) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636)

The information agent is D.F. King & Co., Inc. (212 269-5550, 866 796-1271, +44 0 207-920-9700, chile@dfking.com or dfking.com/chile).

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