#Exchange Offer #Chile #Santiago #Republic of Chile #Euro-denominated notes

Overview of Chile's Euro-Denominated Exchange Offer

On July 1, 2025, the Republic of Chile revealed key pricing terms linked to its recently announced exchange offer for Euro-denominated notes. The offer, which initially commenced on June 24, 2025, is set to culminate with significant implications for both the government and investors. Here’s a thorough breakdown of what the exchange process involves, the eligible notes, and the proposed exchange ratios.

Exchange Offer Details

The exchange offer provides an opportunity for holders of specific Euro-denominated notes, referred to as "Eligible Notes," to tender their notes in a swap for new securities. Chile is specifically targeting holders of outstanding notes with two sets due in 2026 and 2029. These notes are part of a broader effort to optimize government financing through advantageous debt management strategies.

Eligible Notes and New Notes

The exchange offer pertains to:

• - 1.750% Notes due 2026
• - 1.440% Notes due 2029

In return for tendered notes, investors will receive 3.800% Notes due 2035. The process requires compliance with specific conditions outlined in the invitation documents sent to eligible noteholders.

Exchange Ratios

A critical feature of the exchange offer is the defined Exchange Ratios, allowing investors to understand how much of the new 3.800% Notes they will receive for their eligible notes. Investors can expect to exchange:

• - For each €1,000 in principal of the 2026 Notes, an effective value of approximately €1,015.31 in the new notes will be issued.
• - For the 2029 Notes, the exchange will yield approximately €972.38 for each €1,000 in principal.

These ratios are determined based on the anticipated yields, which reflect the current market's intermediate swap rates and spreads related to the respective series of notes.

Timeline and Conditions

The exchange offer is set to conclude at 5:00 PM CET on July 1, 2025. Following this, investors can expect an announcement the next day regarding:

• - The aggregate principal amount of notes that are accepted in the exchange.
• - The total principal amount of new notes to be issued.
• - The anticipated proration factors for each series of eligible notes, should the total tendered exceed expectations.

Settlement Date

The anticipated settlement for the exchange is scheduled for July 7, 2025. It’s imperative for participants in the exchange to be aware that if there are any delays beyond seven business days after the expected settlement date, adjustments to the Exchange Ratios will be communicated to account for accrued but unpaid interest.

Conclusion

Chile's strategic move to offer these terms reflects a proactive approach to managing national debt while providing opportunities for investors to acquire new securities. As the date for the exchange offer approaches, both market watchers and current noteholders will closely monitor the developments. Future updates from Chile are anticipated, offering additional clarity on participation outcomes and exchanges, which could significantly influence the market’s perception and investor decisions.

For more information about the exchange offer, including further specifics on the new notes and the complete documentation, investors should refer to the Information and Depositary Agent, Global Bondholder Services Corporation. The detailed guidelines are available through their official communication channels.

As always, interested parties should remain vigilant about the legal frameworks that govern these offerings, especially pertaining to any restrictions applicable in various jurisdictions. Keeping abreast of these nuances will be crucial for maximizing participation and ensuring compliance while navigating through the complexities of governmental financial instruments. Additionally, the invitation documents specify that participation in this offer is solely contingent upon the terms outlined therein, with a clear emphasis on investor education and awareness regarding potential regional regulatory stipulations.