Retirement for record breaker
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Retirement for record breaker

Chile

Sometimes emerging-market sovereigns retire higher-yielding Brady bonds when they issue lower-yielding globals. Sometimes, they issue higher-yielding global bonds even when they have access to lower-cost funding from the official sector in an attempt to diversify their funding base. Never, until now, has a country retired higher-yielding official-sector debt as part of a lower-yielding bond issue.


       
Finance minister Eyzaguirre: a borrowing
strategy tied into dollar earnings from copper

The whole point of funding from multilateral development banks, after all, is that it is extended at concessionary rates in return for preferred-creditor status and the country's accession to an IMF plan.


But in April Chile found itself in the enviable and thus far unique position of being able to retire $600 million of World Bank debt yielding between 7% and 8% by issuing a five-year global bond yielding just 5.695%.



Gift this article