Chilean Banks Plan To Sell Up To $6 Billion In US Commercial Paper
04 Maio 2012 - 7:09PM
Dow Jones News
Chile's largest and second-largest banks plan to sell up to a
combined $6 billion in U.S. commercial paper to finance their loan
portfolios amid volatile funding sources, according to statements
from Standard & Poor's.
Emerging-market bank borrowers have switched to bond markets
from the bank lending market as traditional European lenders face
increasing asset-valuation troubles and large U.S. banks confront
greater regulatory pressure.
Chile's largest bank, Banco Santander-Chile (BSAC,
BSANTANDE.SN), intends to sell up to $5 billion in commercial
paper, a short-term debt instrument which usually matures in less
than 270 days and bears a low yield.
Chile's second-largest bank, Banco de Chile (BCH, CHILE.SN),
meanwhile, has an up to $1 billion commercial-paper program.
Both entities are the first commercial banks in Latin America to
announce commercial-paper programs in the U.S., which come on the
heels of a drop in the loan market for emerging-market bank
borrowers.
"What we are seeing in emerging markets' credit markets is
similar to the U.S. experience post-2007 where a similar rotation
from bank loans to bond markets occurred," ING Bank NV said in a
research note.
New emerging-market bank lending dropped 51% on-quarter in the
first three months of the year, while emerging-market bond issuance
nearly doubled during the same period, ING said.
Commercial paper, common among U.S. borrowers, has become an
attractive option for banks searching for cheap financing.
"Commercial papers allow banks to access cheap financing as
traditional funding sources from European banks have become more
expensive," said Diego Torres, head of fixed-income research at
local brokerage Munita, Cruzat y Claro.
Banco de Chile aims to increase its trade finance operations and
to finance other general corporate purposes with its recently
announced commercial-paper program, the bank said in a statement.
The program was rated A-1 by Standard & Poor's.
With its own commercial-paper program, Santander Chile looks "to
access less volatile funding sources, which could improve its
funding cost and ease pressure on net interest margins due to high
competition in the Chilean banking system," Standard & Poor's
said in a statement. The agency gave an A-1 rating to the
program.
Santander Chile executives could not be reached for comment.
-By Graciela Ibanez, Dow Jones Newswires; 56-2-715-8929;
graciela.ibanez@dowjones.com
Banco de Chile (NYSE:BCH)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Banco de Chile (NYSE:BCH)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024