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The increase in levels produces a bond fever in Chile



So far in 2018, Chilean companies have made 60 bond issues totaling $ 3.3 billion, a 19% increase over last year.

Chilean companies are working full time to issue new debt before the Chilean Central Bank and the US Federal Reserve meet the expected rate hike in the last month of the year.

New issues that might end up sealing a "good year" for the Chile placement market. So far in 2018, Chilean companies have made 60 bond issues totaling $ 3.3 billion, an increase of 19% compared to $ 2.8 billion placed in 2017 through 51 operations, according to data collected. by the Santiago Stock Exchange.

"This year there is more appetite because issuers are rushing to borrow at prices that are still low," said Joaquin Aguirre, Tanner's strategy manager, adding that 2017 is a year marked by "strong economic and political uncertainty that has stopped to a certain extent dynamism good "from the market.

Latam Airlines, Parque Arauco and Entel will be one of the companies to issue bonds. According to data compiled by Bloomberg, Chilean companies have requested authorization to obtain up to US $ 6 billion in the coming months on the debt market.

Until now, most of the problems already existed in the Unidades de Fomento, accounting measures in Chile were indexed to inflation. So far in the last quarter of this year nine corporate bond placements totaled $ 699 billion, almost double the amount spent in the same period of 2017 in the same number of operations, according to data from the Santiago Trade Exchange.

The Chilean Central Bank announced in September that it would start attracting monetary stimulus because inflation was below target and given dynamism in the economy. The issuer fulfilled its promise by raising the benchmark interest rate in October to 2.75%. However, the market is divided on whether the board will maintain or raise interest rates at the December 4 meeting.

Interest rate swap contracts indicate that the market is betting that the Central Bank will apply at least three additional increases from 25 basis points to 3.5%. For its part, Fed chairman Jerome Powell yesterday gave hope about the possibility of a break in the cycle of monetary adjustments in 2019, after increasing 75 basis points this year. The issuing body will proceed to a new increase in the meeting on December 19.

With prices still low, investors continue to buy everything that comes to the market. "Investors continue to look for good returns, and we have seen attractive placements and far below historical levels of spread," said Nevasa asset management assistant Jorge García.


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