International investors will be able to access the domestic Chilean capital markets with increased ease as of 1 February 2017, following close cooperation between the Chilean Ministry of Finance and Euroclear to align the country’s post-trade processes with international standards.
For the first time, Republic of Chile government bonds, denominated and payable in pesos have simultaneously been made available to domestic and international investors, in accordance with the financial integration agenda promoted by the Chilean government.
The government bonds offered and sold to international investors representing approximately 20 per cent of the global issuance, were settled through Euroclear Bank’s account in Deposito Central de Valores (DCV), the Chilean Central Securities Depository (CSD).
Rodrigo Valdés, minister of finance, Chile, says: “Our partnership with Euroclear has yielded this important milestone for our capital markets. Being able to tap into the liquidity provided by international investors is tremendously important for the continued development of our local market. And, it should yield tangible benefits such as reducing the cost of borrowing, increasing liquidity in our local markets and furthering investment in our economy. By making our bonds Euroclearable, we have aligned our capital market infrastructure with the globally recognised standards that are synonymous with Euroclear’s robust, resilient and sound risk-management principles.”
Stephan Pouyat (pictured), global head of capital markets and fund services, Euroclear, says: “We are very pleased to be part of this watershed moment for the Chilean capital markets. The new regulatory framework, including the new tax treatment rule, enables Euroclear to extend its already well-developed Latin America offering and provide international investors with a simple, efficient and cost-effective way of accessing Chilean assets. This is the result of the strong partnership with the Ministry of Finance to align the needs of the Chilean market and those of international investors. A more robust financial environment supports the sustainable development of social and physical infrastructure in Chile.”
Fernando Yañez, general manager of Deposito Central de Valores, adds: “Chilean sovereign bonds becoming Euroclearable is good news for the market, and represents a successful relationship with Euroclear. We are confident that Euroclear's market participation will generate more demand for these bonds from international investors.”