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Tuesday, June 30 de 2020

Ministry of Finance announces the Treasury Bond issuance plan via SOMA for the third quarter of 2020

The Ministry of Finance plans on issuing up to US$2.5 billion in local currency Treasury Bonds during the third quarter of 2020. These are scheduled to be issued through the SOMA system of the Central Bank of Chile, acting as Fiscal Agent of the Republic of Chile. The US$2.5 billion planned to be issued during the third quarter of the year is part of the total ~US$12.7 billion to be issued in 2020, consistent with the annual debt limit authorized by Congress. Treasury bond issuances in local and foreign currencies during the first semester of 2020 reached approximately US$9.4 billion.

The third quarter issuance calendar includes the issuance of short-term nominal Treasury notes (between 6-12 months). The issuance of these instruments has the objective of contributing to the well-functioning of the local financial market by facilitating credit to the real economy, including households and firms. In addition, the calendar also considers the issuance of nominal local currency bonds due in 2025.

Separately, the Ministry of Finance will continue to implement liability management operations in order to strengthen liquidity in the local market and manage the maturity profile. The Ministry of Finance, through its Treasury, offers the option to repurchase Treasury Bonds already issued and previously allocated (Old Bonds) in exchange of cash, or to be exchanged for New Treasury Bonds (New Bonds). These operations are not considered within the annual debt issuance limits authorized by Congress.

The following table describes the 2020Q3 issuance calendar via SOMA:

Table 1: Auction Calendar via SOMA, Q3 2020

 Date of Auction

Millions of Pesos

Nominal Notes*

 BTP-2025

July 8, 2020

-

LM**

July 22, 2020

 474,000 (12M)

LM**

August 12, 2020

537,000 (8M)

487,000 + LM**

August 19, 2020

 -

487,000 + LM**

September 2, 2020

537,000 (11M)

LM**

 

(*): In parentheses the maturity of short notes.

(**): Liability Management (LM) implies repurchase and exchange

This auction calendar is also available on the Ministry of finance website, in the Public Debt Office section (https://www.hacienda.cl/english/public-debt-office/central-bank-auctions/auction-dates.html). 

All the operations described herein will be executed through the SOMA of the Central Bank of Chile, acting as Fiscal Agent, following the rules established by the Central Bank in the “Reglamento Operativo” and in the additional documents that rule these kinds of transactions. In relation with the Liability Management Operations, at least 5 days prior to each operation there will be informed the bonds and the maximum notional amount to be accepted by Treasury.

These plans may vary in case of unexpected changes in market conditions and/or adjustments in the government’s funding needs. If this were to occur, it will be appropriately informed. 

 

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