Cleary Gottlieb has counselled the underwriters and dealer managers on a landmark financing transaction for the Republic of Chile that included (i) the issuance of USD $2.25 billion of US dollar denominated bonds, (ii) the issuance of €750 million of euro denominated bonds, (iii) an offer to exchange approximately USD $1.69 billion of euro denominated bonds. USD 1.69 billion of US dollar-denominated debt securities for US dollar-denominated debt securities with longer maturities and (iv) an offer to exchange approximately €4.95 billion of euro-denominated debt securities for euro-denominated debt securities with longer maturities.
Credit Agricole Securities (USA), HSBC Securities (USA), Santander US Capital Markets, Scotia Capital (USA) and SG Americas Securities, acted as underwriters in the Republic of Chile’s (Chile) SEC-registered offering of $1.15 billion US dollar-denominated Bonos de Sustentabilidad (SLBs) due 2036 (“2036 Bonds”) and $1.1 billion US dollar-denominated SLBs due 2054 (“2054 Bonds”). The offerings of the 2036 and 2054 Bonds took place on 27 June 2023 and are scheduled to close on 5 July 2023.
Crédit Agricole Corporate and Investment Bank, HSBC Securities (USA), Banco Santander, The Bank of Nova Scotia, London Branch and Société Générale acted as underwriters in the offering registered with the Chilean SEC of EUR 750 million of 4.125% SLB bonds due 2034 (“2034 Bonds”). The offering of the 2034 Bonds was priced on 28 June 2023 and is scheduled to close on 5 July 2023.
Under the terms of (i) the 2036 Notes and the 2054 Notes, Chile offered to pay tiered rates (ranging from 5 to 50 basis points), and (ii) the 2034 Notes, Chile offered to pay an additional coupon of 50 or 100 basis points, in each case, if Chile does not achieve the following sustainability performance targets: (a) absolute annual greenhouse gas (GHG) emissions of 95 metric tons of carbon dioxide, (b) a GHG budget of 1. 100 metric tonnes of carbon dioxide between 2020 and the end of 2030, and/or (c) at least 40% women on the boards of companies reporting to the Chilean Financial Market Commission by the end of 2031.
In addition, the firm advised the underwriters of the 2036 and 2054 Bonds, as dealer managers, in the Chilean SEC-registered invitation to holders of certain of its outstanding US dollar-denominated debt securities to tender such bonds in exchange for 2036 and 2054 bonds; and the underwriters of the 2034 Bonds, as dealer managers, in the Chilean SEC-registered invitation to holders of certain of its outstanding euro-denominated debt securities to tender such bonds in exchange for 2034 bonds. The dollar exchange offer was launched on 27 June 2023 and the euro exchange offer was launched on 28 June 2023. Both offers will expire on 5 July 2023 and will be settled on 12 July 2023.
Cleary’s team included partner Jorge Juantorena (pictured) and associates Ignacio Lagos and Rodrigo Lopez Lapeña. Counsel Matthew Brigham and associates Jesse Hong and Joseph Roy advised on New York tax matters. All lawyers are based in New York except Joseph Roy, who is based in San Francisco.