M&B participates in the first sustainable global bond issuance by the Republic of Chile
Morales & Besa acted as special local counsel to the Republic of Chile, acting through its Ministry of Finance, in the issuance and offering of “Sustainable” Sovereign Bonds placed in the Formosa market in Taiwan
This offering constitutes the first “Sustainable” global bond issuance by the Republic of Chile and by virtue of which Chile has declared its intention to invest an amount equal to the net proceeds from the sale of the notes into projects that may qualify as “eligible green expenditures” and “eligible social expenditures” as such are defined under the Sustainable Bond Framework signed by the Government of Chile in accordance with the standards developed by the International Capital Markets Association (ICMA).
The bonds which become due in 2053 were issued in the principal amount of $1,500,000,000 dollars bearing a 3.5% coupon.
Also, the issuance was made with a dual listing on the London Stock Exchange and, for the first time, in the Taipei Stock Exchange, allowing access to a wider universe of investors in Asia.
Credit Agricole CIB, Taipei Branch and Goldman Sachs (Asia) L.L.C, Taipei Branch, acted as underwriters, joint lead managers and book-runners in the issuance and placement of the bonds; the Bank of New York Mellon, acted as trustee, while Merrill Lynch International acted as structuring agent in connection with the issuance of the bonds.
This transaction is particularly relevant because (i) it is the first time that the Republic of Chile issues a sustainable bond, which finances a combination of social and green projects; (ii) it is the first time that the Republic of Chile issues a “Formosa Bond”; (iii) this issue is the first-ever sovereign sustainable bond to be listed on the Taipei Stock Exchange; (iv) the placement rate was the lowest achieved by a sovereign bond through a Formosa bond; and (v) the issuance achieved the lowest spread among sovereign issues of emerging economies in a thirty-year term.
Morales & Besa’s team was led by partner Guillermo Morales, senior associate Santiago Martinez and associates Mariana Schnettler and Bárbara Echaiz.
