Chile to pay $989.2 million in capped tenders for five note series

By Susanna Moon

Chicago, Jan. 30 – Chile said it set the maximum purchase amount at $989,197,102 in the capped tender offer for five series of its global notes announced Monday.

The purchase price for each $1,000 principal amount will be as follows, according to an update by the issuer:

• The $739,844,000 of 3 7/8% global notes due 2020 will be purchased at a price of $1,041.02, which was set using a spread of 6 basis points over the 2% Treasury due Jan. 31, 2020 for a reference yield of 2.12%;

• The $561,204,000 of 3¼% global notes due 2021 will be purchased at a price of $1,029.83, which was set using a spread of 13 bps over the 2% Treasury due Jan. 15, 2021 for a reference yield of 2.252%;

• The $634,119,000 of 2¼% global notes due 2022 will be purchased at a price of $985.71, which was set using a spread of 8 bps over the 2 3/8% Treasury due Jan. 31, 2023 for a reference yield of 2.492%;

• The $758,262,000 of 3 1/8% global notes due 2025 will be purchased at a price of $1,016.54, which was set using a spread of 17 bps over the 2¼% Treasury due Nov. 15, 2027 for a reference yield of 2.697%; and

• The $1,349,122,000 of 3 1/8% global notes due 2026 will be purchased at a price of $1,009, which was set using a spread of 30 bps over the 2¼% Treasury due Nov. 15, 2027 for a reference yield of 2.697%.

Non-preferred tenders were due by 12 p.m. ET on Jan. 29 and preferred tenders by 4 p.m. ET on Jan. 29.

Preferred tenders are defined as those accompanied by firm orders to buy new notes. The issuer previously said that if the tender was oversubscribed, it would give preference to preferred tenders when accepting notes.

For preferred tenders, Chile said it accepted $58,553,000 of the $126,878,000 tendered 2020 notes; all of the $53,002,000 of 2021 notes; all of the $91,437,000 of 2022 notes; all of the $261,105,000 of 2025 notes; and all of the $508,789,000 of 2026 notes.

The issuer accepted for purchase none of the following non-preferred tenders: $33.53 million of 2020 notes; $57,852,000 of 2021 notes; $22,985,000 of 2022 notes; $14.24 million of 2025 notes; and $24,547,000 of 2026 notes.

Settlement is scheduled for Feb. 5.

In addition to the purchase price calculated using the formulas above, Chile will also pay accrued interest up to but excluding the settlement date. Because the 3 7/8% notes have an interest payment on Feb. 5, accrued interest for this series will be zero.

The offer was conditional on the pricing of a sale of new notes. Chile announced on Monday that it will sell global notes due 2028. Proceeds from the new notes will be used to pay the purchase price in the tender and also for general budgetary purposes.

The dealer managers are Citigroup Global Markets Inc. (212 723-6106 or 800 658-3745), Goldman Sachs & Co. LLC (212 902-6595 or 800 828-3182), J.P. Morgan Securities LLC (212 834-7279 or 866 846-2874) and Merrill Lynch, Pierce, Fenner & Smith Inc. (646 855-8998 or 888 292-0070) with Citigroup handling billing and delivery.

The information agent is D.F. King & Co., Inc. (866 721-1324, 212 269-5550, chile@dfking.com or +44 20 7920 9700).

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