The Ministry of Finance received the Sovereign Issuer Award for the year 2019 awarded by LatinFinance – leading media source specialized in finance and international economics, with a particular focus on Latin America and the Caribbean.
This award was selected by the LatinFinance’s Editorial Board, considering a number of factors including the innovative elements of the transaction, its complexity, size, execution, and market importance. In this case, all transactions made between October 1, 2018 and September 30, 2019 were considered.
Chile was selected primarily for being the first country in the Americas to issue sovereign green bonds. In addition, it was awarded for its financing strategy, which achieved historical demand milestones, rates, spreads, and a significant diversification of the investor base, and record level of foreign participation in placement of bonds in pesos.
The Minister of Finance, Ignacio Briones, valued the recognition of LatinFinance, indicating: “Chile maintains a firm commitment on climate action. Our green issuances showed that it is possible to take concrete steps on climate action and achieve positive financial performance. Looking forward, we will continue working to obtain the best financing conditions.”
This is the first time that the Ministry of Finance receives LatinFinance’s Sovereign Issuer of the Year award. It is important to note that this recent recognition is in addition to the awards made by GlobalCapital to the green bond of the year 2019 for Latin America, by GlobalMarkets by the Office of Public Debt of Latin America for the year 2019, and to that of Netexplo Smart Cities 2020 granted by UNESCO.
Green Bonds issued in 2019
The Ministry of Finance issued a total of approximately US $ 2.4 billion in green bonds during 2019. This amount was issued in two operations during the month of June 2019. The first operation was the issuance of a green dollar bond, with maturity in 2050, for a total amount of approximately US $ 1,431 million, which also included a liability management operation. The second operation was for a green bond denominated in euros with a maturity in 2031 for € 861 million.
Both operations achieved record demand and historically low rates, with a broad participation of “green” investors and taking advantage of historically low rates in the international market. In fact, in both cases a negative new issue premium was obtained, that is, the rates obtained were below those estimated by secondary market information.
More information about the green bonds of the Republic of Chile can be found on the institutional website: https://www.hacienda.cl/oficina-de-la-deuda-publica/bonos-verdes.html