This content is from: Local Insights


On April 15 1998, the Chilean Central Bank amended certain exchange rules on the issue of Eurobonds and American depositary receipts (ADRs) to cut restrictions and increase flexibility.

The Central Bank cut the minimum rating level of issuer's unsecured external long term debt obligations from BBB(+) to BBB(-) for banks issuing subordinated Eurobonds and from BBB(+) to BB for corporate issuers.

It also reduced the average weighted term of the subordinated Eurobonds issued by banks from 10 years to five years.

The Central Bank cut the requirement of a minimum nominal amount for the issue of Eurobonds by banks (US$50 million) and by corporates (US$25 million) and also the requirement of a minimum nominal amount of foreign currency to be entered into Chile as a result of the offering of ADRs by Chilean companies (US$25 million in the first offering and US$10 million in subsequent offerings by the same company).

The new rules should increase the number of Chilean companies allowed to issue Eurobonds and ADRs to over 100.

Ignacio Arteaga E and Cristian HerreraB

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