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Increased rates cause an ulcerative fever



By 2018, Chilean corporations have issued 60 bonds totaling $ 3.3 billion, an increase of 19% over last year.

Chilean companies are working full-time to issue new debts before both the Central Bank of Chile and the US Federal Reserve achieve the expected growth rate in the last month of the year.

Possible new issues will end with a "good year" for the Chilean market. By the end of 2018, Chilean corporations have issued 60 bonds totaling $ 3.3 billion, up 19% over $ 2.8 billion, which was deployed in 2017 in 51 operations, according to aggregated data. . from the Santiago Stock Exchange.

"This year, there are more appetite because issuers are in a hurry to borrow at rates that are still low," says Tanner's strategy manager Joaquin Aguirre, adding that 2017 was a year with "strong economic and political uncertainty," partly halt the good dynamics of the market.

Latam Airlines, Parque Arauco and Entel would be one of the companies issuing bonds. According to data collected by Bloomberg, Chilean corporations have requested $ 6 billion debt market access in the coming months.

So far, most of the problems have been the Unidades de Fomento, a Chilean accounting measure indexed by inflation. So far, nine corporate bonds have been placed in the last quarter for a total of $ 699 billion, which is almost twice the same period, issued in the same period in 2017, in the same operation, according to the Stock Data Santiago Commerce.

The Central Bank of Chile announced in September that it will take away the monetary stimulus, as inflation is lower than the target and given the dynamics of the economy. The issuer fulfilled its promise by raising its benchmark value to 2.75% in October. However, the market is divided, will the board maintain or raise the rate at its meeting of 4 December.

Interest rate swaps show that the market is betting that the central bank applies at least three additional increases from 25 basis points to 3.5%. On the other hand, Chairman of the Fed's Jeroen Powell yesterday awaited that in 2019, a possible cessation of the monetary correction cycle would be halted, increasing by 75 basis points this year. The issuing authority will renew its meeting on December 19th.

The rates are still low, investors continue to buy everything that comes to the market. "Investors continue to look for good profits and we have seen interesting placements and levels of penetration that are much lower than historic," says Jorge García, Nevada Asset Management Assistant.


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