(Bloomberg) -- Chile tapped international debt markets with sales of dollar and euro-denominated bonds, joining nations from Mexico to Hungary in what is shaping out to be a busy week for issuance.
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The South American country sold 1.7 billion euros of seven-year social notes and $1.6 billion of 12-year bonds on Tuesday. The information on the deals comes from people familiar with the matter, who asked not to be identified because they’re not authorized to speak about it.
The sale adds to a rush of deals in credit markets. Europe has seen a record number of borrowers tap investors Tuesday to take advantage of spreads that are near the tightest in three years. Slovenia sold 1 billion euros of bonds and Hungary is out with a debt deal.
“They are taking advantage of the relatively tight spreads,” said William Snead, an analyst at Banco Bilbao Vizcaya Argentaria SA in New York. “The appetite for primary market issuance remains strong, and most likely investors have put money aside in anticipation. The bond should do well.”
Saudi Arabia and Mexico kicked off the year for EM sovereign issuance with large sales on Monday. The kingdom, one of the largest bond issuers in emerging markets last year, issued $12 billion of bonds to fund its vast economic-transformation plan. Mexico, meanwhile, sold a record $8.5 billion in debt, more than half of its annual hard-currency debt limit.
New Notes
The euro-denominated bonds will yield around 140 basis points over mid-swaps, tightening from initial price talks of 175 basis points. Meanwhile, the dollar bonds will yield around 105 basis points over US Treasuries, also down from initial price talk of 137.5 basis points.
Chile’s bonds were among the worst performers in an index of emerging-markets Tuesday. They’ve lagged peers in the past year, returning about 1% while developing nation notes have advanced almost 10% in the span.
Concerns about China, Chile’s main trading partner, have weighed on the country’s markets broadly, with the currency dropping about 11% in the past year and hovering near its weakest level since mid-2022 amid a slide in metals. A weaker currency fans inflation by making imports more expensive, and Chile’s small and open economy is vulnerable because it obtains nearly all its fuels from abroad.
The country had last tapped global debt markets back in July, when it sold 1.6 billion euros of social notes maturing in seven years. Prior to that, it issued $1.7 billion of five-year notes in January.