Banco Santander Chile issues first floating bond in Chilean pesos in the local market

8/27/2018, 7:50 PM (Source: GlobeNewswire)

 Demand reached 2.5 times the offering size, chiefly bought by mutual funds, pension funds and banks

 Santiago, August 27, 2018.

Santander Chile became the first issuer to issue a floating bond in Chilean pesos in the local market. The bond pays annual coupons of variable interest calculated based on the average Central Bank interbank overnight rate plus a spread.  The bond was issued through a Dutch auction, which represents a spread of 66bp over the ICP[1]. The series U4 for a total of Ch$75 billion will be due on January 10, 2022 and has a local rating of AAA by Fitch Ratings and Feller Rate. 

The development of this new bond started more than a year ago, finishing off with an extensive local roadshow, where investors could learn more about the characteristics of this new financial instrument. Santander Chile seeks to satisfy the need in the local market to have an investment that directly protects the investor from an increase in interest rates, as well as opening up the way for a floating local bond market much the same as in developed financial markets. In the United States, approximately 17% of the current bonds from financial institutions are floating[2].                                                                                                                                         

For Emiliano Muratore, Chief Financial Officer of Santander Chile, "the issuance of this instrument is a clear reflection of our solid position as a leader in the local financial system and allows us to deepen the Chilean debt market, taking us one step closer to reach the highest of international standards. The result of this bond issuance also manifests the excellent reception among the different investors in the country".

About  Banco Santander

Banco Santander Chile is the largest Bank in the Chilean market in terms of assets, loans and equity. As of June 30, 2018, we had total assets of Ch$37,589 billion (U.S.$57.5 billion), outstanding loans net of allowances for loan losses of Ch$28,429 billion (U.S.$43.4 billion), total deposits of Ch$20,809 billion (U.S.$ 31.8 billion) and equity of Ch$3,043 billion (U.S.$4.7 billion). We have 376 branches, 1,001 ATMs, and 11,453 employees. Our BIS ratio up to June 2018 was 12.8%, with a core capital ratio of 10.0%. Our long-term credit risk rating are A1 by Moody's, A Fitch and A Standard & Poor's.

[1]The average Central Bank rate from the average interbank rate index (Indice de Cámara Promedio, or ICP) as calculated and published by the Association of Banks and Financial Institutions of Chile on a daily basis from the average interbank rate reported by the Central Bank of Chile.

[2]Source: Bloomberg


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Source: Banco Santander-Chile via Globenewswire

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