May 30, 2019 | Cbonds
|We are pleased to announce that Cbonds is expanding the coverage of international markets. Chilean domestic corporate bonds have been added to the database. A total of 1 249 Chilean domestic corporate bonds are available on Cbonds website, with 1 185 issues outstanding. |
Bond Market Profile
The largest share of the Chilean corporate bond market is represented by the fixed rate instruments (more than 99% of the total market volume). For the floating rate bonds, Indice Camara Promedio (ICP) is used as the reference rate. An example of such issue is Banco Santander Chile, FRN 10jan2022, CLP (U4). Most of the bonds (87% of the market) are issued in CLF, Chilean currency unit indexed according to inflation (Unidad de Fomento). An example of such issue is Clinica Las Condes, 2.5% 15mar2023, CLF (E). The long-term debt instruments (with a maturity of over 5 years) dominate the Chilean market. The average maturity period of the domestic corporate bonds is 15 years.
Banks are the main issuers in the Chilean corporate bond market with more than 57% of the market volume. The top five banks in terms of the volume of issued liabilities include 5 commercial banks: Banco Santander Chile, Banco de Chile, Itau CorpBanca, Banco del Estado de Chile and Banco de Credito e Inversiones.
The Chilean financial market takes a leading position among the Latin American and the Caribbean countries. According to the report of the World Economic Forum 2018, Chile takes the first place in terms of the value of index component "Financial System".
Despite the high competitive performance of the Chilean financial market, in 2018 the country's stock market was in decline. At the end of 2018, the key index of the Chilean stock market IPSA dropped by 9%, which is the worst since 2013, when there was a decrease of 14%. The collapse of the stock market was driven by the decline in global economic growth and the outflow of funds from the stock market to the debt market, which increased in popularity amid rising rates.
The financial market was also affected by the gradual increase in the federal funds rate, which may lead to a depreciation of the Chilean peso against the US dollar, as a result of which the Board of the Central Bank of Chile decided to move to an restrictive monetary policy and for the first time since 2017 to raise the Central Bank policy rate (Tasa de Politica Monetaria) by 25 bps up to 2.75% in October 2018. In January 2019, the rate was again raised to 3%.
2018 turned out to be a favorable year for Chile's economy - the country's GDP increased by 4% for the year, which is the best performance since 2012. Moreover, Chile is the region's leader in terms of GDP per capita, which in 2018 neared USD 26 thousands. Subject to the IMF forecasts, by 2022 the value of this indicator may exceed USD 30 thousands. At the same time, the country maintains a relatively low and stable inflation rate – 2.2% and 2.4% in 2017 and 2018, respectively, with the target corridor of 2-4% set by the Central Bank of Chile.
The main threat to Chile's economy is its dependence on copper prices, the export of which is the main source of income for the country's budget. The tense trade relations between the United States and China may lead to slowdown in copper production and demand from the latter. Since China is the main global importer of this metal (50% of the aggregate global demand), the decline in demand of this country will significantly reduce the volume of the Chilean export.
Traditionally, daily quotes, bond calculator, key issue parameters, cash flow and issue documents are available for all the issues.
Please note that access to these data is included in the Cbonds-Premium tariff. Information is available in eight languages: Russian, English, Italian, German, Spanish, Polish, Chinese, and Ukrainian.
Company: Cbonds Group
|Full company name||Cbonds Ltd|
|Country of risk||Russia|
|Industry||Information and High Technologies|