Chile announces pricing for 10-part exchange offer

By William Gullotti

Buffalo, N.Y., July 6 – The Republic of Chile priced 10 concurrent exchange offers covering $6.48 billion aggregate principal amount from six series of dollar-denominated notes and €4.95 billion aggregate principal amount across another four euro-denominated series of notes, according a press release on Thursday.

Dollar-denominated offer

As previously reported, the republic invited holders on June 27 to tender their notes in exchange for 2036 notes or 2054 notes. The 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.

The new notes were reopened, with the following considerations per $1,000 principal amount:

• $971.26 for the 2036 notes, based on a spread of 123 basis points over the 3 3/8% U.S. Treasury due May 15, 2033 to yield 5.267%; and

• $978.75 for the 2054 notes, based on a spread of 148 bps over the 3 5/8% U.S. Treasury due Feb. 15, 2036 to yield 5.474%.

The combined offer was divided into two groups, with holders of group A notes invited to submit offers to exchange for either 2036 notes or 2054 notes, and holders of group B notes are invited to submit offers to exchange for 2054 notes only.

The group A exchange offers were priced per $1,000 principal amount as follows:

• The $318,728,000 outstanding 3 1/8% notes due 2025 (Cusip: 168863BW7) were priced based on the 4Ό% U.S. Treasury due May 31, 2025 without a spread for an exchange price of $976.13, reflecting a 1.013392 exchange ratio for the 2036 notes and a 1.005562 ratio for the 2054 notes;

• The $709,316,000 outstanding 3 1/8% notes due 2026 (Cusip: 168863CA4) were priced based on the 4 1/8% U.S. Treasury due June 15, 2026 and a spread of 20 bps for an exchange price of $957.12, reflecting a 0.999733 exchange ratio for the 2036 notes and a 0.992008 ratio for the 2054 notes;

• The $2 billion outstanding 3.24% notes due 2028 (Cusip: 168863CF3) were priced based on the 3 5/8% U.S. Treasury due May 31, 2028 and a spread of 50 bps for an exchange price of $933.25, reflecting a 0.974358 ratio for the 2036 notes and a 0.96683 ratio for the 2054 notes; and

• The $1,758,000,000 outstanding 2.45% notes due 2031 (Cusip: 168863DP0) were priced based on the 3 3/8% U.S. Treasury due May 15, 2033 and a spread of 65 bps for an exchange price of $859.11, reflecting a 0.895003 ratio for the 2036 notes and a 0.888088 ratio for the 2054 notes.

The offers for the group B notes priced as follows:

• The $407.62 million outstanding 3 5/8% notes due 2042 (Cusip: 168863BP2) were priced based on the 3 7/8% U.S. Treasury due May 15, 2043 and a spread of 110 bps for an exchange price of $796.89 and an exchange ratio of 0.820727; and

• The $1,284,412,000 outstanding 3.86% notes due 2047 (Cusip: 168863CE6) were priced based on the 3 5/8% U.S. Treasury due Feb. 15, 2053 and a spread of 125 bps for an exchange price of $812.48 and an exchange ratio of 0.831535.

As previously reported, the exchange ratio accounts for accrued interest.

Euro-denominated offer

On June 28, Chile next invited noteholders from four series of euro-denominated notes to tender their notes for a similar exchange. The republic offered holders to exchange for additional 4 1/8% notes due 2034, likewise repricing the reopened notes per €1,000 principal amount to calculate the exchange ratio.

The reopened 2034 notes were repriced at a spread of 128 bps over an interpolated mid-swap rate to yield 4.527% at a reopening price of €965.79.

The euro-denominated exchange offers, with considerations based per €1,000 principal amount, subsequently priced as follows:

• The €1,641,550,000 outstanding 1 5/8% notes due Jan. 30, 2025 (ISIN: XS1151586945) were priced using an interpolated mid-swap rate minus a spread of 45 bps for an exchange price of €970.75 and an exchange ratio of 1.011825;

• The €1,109,770,000 outstanding 1Ύ% notes due Jan. 20, 2026 (ISIN: XS1346652891) were priced using an interpolated mid-swap rate minus a spread of 5 bps for an exchange price of €959.68 and an exchange ratio of 0.992861;

• The €709,103,000 outstanding 1.44% notes due Feb. 1, 2029 (ISIN: XS1760409042) were priced using an interpolated mid-swap rate plus a 55 bps spread for an exchange price of €883.71 and an exchange ratio of 0.914265; and

• The €1,490,756,000 outstanding 1 7/8% notes due May 27, 2030 (ISIN: XS1236685613) were priced using an interpolated mid-swap rate plus a 60 bps spread for an exchange price of €882.30 and an exchange ratio of 0.912806.

Likewise, the exchange ratio accounts for accrued interest.

Additional details

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 for the exchange offers remains slated for July 12.

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

The dealer managers for the dollar-denominated 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).

The dealer managers for the euro-denominated exchange offer are Credit Agricole CIB (Liability.Management@ca-cib.com, us.liabilitymanagement@ca-cib.com), HSBC Securities (USA) Inc. (888 HSBC-4LM, 212 525-5552, liability.management@hsbcib.com), Banco Santander, SA (LiabilityManagement@gruposantander.com), Bank of Nova Scotia, London Branch (833 498-1660, LM@scotiabank.com) and Societe Generale (+33 1 42 13 32 16, liability.management@sgcib.com).

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