Chile launches exchange offers for six dollar notes in two parts

By Marisa Wong

Los Angeles, June 28 – The Republic of Chile began exchange offers on Tuesday for six series of its dollar-denominated notes, separated into two groups, according to an FWP filed Wednesday with the Securities and Exchange Commission.

The aggregate outstanding principal amount of notes covered by the offers is about $6.48 billion.

Chile is inviting holders to tender their notes in exchange for 2036 notes or 2054 notes. These additional 2036 notes and 2054 notes, if issued, will be consolidated and form a single series with Chile’s newly priced $1.15 billion 4.95% notes due 2036 and $1.1 billion 5.33% notes due 2054.

Holders of Group A notes are invited to submit offers to exchange them for either 2036 notes or 2054 notes, and holders of Group B notes are invited to submit offers to exchange them for 2054 notes.

Group A notes include the following series:

• $318,728,000 outstanding 3 1/8% notes due 2025 (Cusip: 168863BW7) with pricing to be based on the 4Ό% U.S. Treasury due May 31, 2025 and a spread of 0 basis points;

• $709,316,000 outstanding 3 1/8% notes due 2026 (Cusip: 168863CA4) with pricing to be based on the 4 1/8% U.S. Treasury due June 15, 2026 and a spread of 20 bps;

• $2 billion outstanding 3.24% notes due 2028 (Cusip: 168863CF3) with pricing to be based on the 3 5/8% U.S. Treasury due May 31, 2028 and a spread of 50 bps; and

• $1,758,000,000 outstanding 2.45% notes due 2031 (Cusip: 168863DP0) with pricing to be based on the 3 3/8% U.S. Treasury due May 15, 2033 and a spread of 65 bps.

Group B notes include the following series:

• $407.62 million outstanding 3 5/8% notes due 2042 (Cusip: 168863BP2) with pricing to be based on the 3 7/8% U.S. Treasury due May 15, 2043 and a spread of 110 bps; and

• $1,284,412,000 outstanding 3.86% notes due 2047 (Cusip: 168863CE6) with pricing to be based on the 3 5/8% U.S. Treasury due Feb. 15, 2053 and a spread of 125 bps.

Subject to proration, holders will receive in exchange for each $1,000 principal amount of existing notes accepted for exchange, new notes applicable to the relevant group having a principal amount equal to $1,000 multiplied by the relevant exchange ratio.

The exchange ratio for each series of existing notes will be determined by dividing the present value for that series of existing notes by the present value of the series of new notes applicable to that series of existing notes.

The exchange ratio will account for any accrued interest.

The exchange ratio for each series of notes will be determined at or around 10 a.m. ET on July 6.

The invitation will expire at 5 p.m. ET on July 6, which is also the withdrawal deadline.

At or around 8 a.m. ET on July 7, Chile will announce the expected aggregate principal amount of each series of existing notes to be accepted (which could be zero for one or more series); the expected aggregate principal amount of each series of new notes to be issued; and the expected proration factor for each series of existing notes, if any.

Settlement is slated for July 12.

The dealer managers for the invitation are Credit Agricole Securities (USA) Inc. (us.liabilitymanagement@ca-cib.com; 866 807-6030), HSBC Securities (USA) Inc. (888 HSBC-4LM, 212 525-5552; liability.management@hsbcib.com), Santander US Capital Markets LLC (USDCMLM@santander.us; 212 940-1442), Scotia Capital (USA) Inc. (LM@scotiabank.com; 833 498-1660) and SG Americas Securities, LLC (liability.management@sgcib.com; 855 851-2108).

Global Bondholder Services Corp. (212 430-3774 for banks and brokers, 855 654-2015 for all others; contact@gbsc-usa.com) is the information and depositary agent.

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