The fifth largest US bank by assets, Goldman Sachs Group Inc, is planning to expand into the Chilean market with the sale of fifty year bonds in the local market. The sale may pave the way for participation by other US companies and other equity firms.
The bank is seeking approval to issue the bonds worth twenty million unidades de fomento. This is the Chilean inflation linked accounting unit and is worth about US$966 million. This would be the first time an American company has sold debt in Chile. Known in Chile as 'huaso' or cowboy, these debt sales programs came to fore when Finance Minister Felipe Larrain relaxed regulatory controls on foreigners selling debt in the local market.
The Goldman Sachs plan includes an option to sell bonds due in fifty years, but this may be trimmed to just five to seven year notes according to Banco de Credito and Inversiones. According to Bloomberg calculations, a borrower would pay out 0.39% percentage point more to sell a five year bond in unidades de fomento than in dollars.
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