Chile's Securitizadora Bice priced a US$17.1 million-equivalent deal, its second placement of paper backed by globals from Empresa Nacional de Electricidad (Endesa Chile). The securitization yielded 5.57%, far tighter than the initial deal, which came at 6.18% in early May (See ASR, 8/26, p. 14). "We feel the deal was a success," said Gonzalo Prieto, deputy head of administration and finances at Securitizadora Bice.

Domestic investors weren't spooked that Endesa Chile's debt has, over the past few months, fallen victim to the regional distress caused by the lemming-like migration away from Brazil and Argentina's intractable economic funk. Historically low yields on Chilean treasurys provided a powerful incentive to go into spread product. At the time of pricing, the yield on 10-year PRC bonds was at an unheard-of 3.1%, yielding a hefty spread of 247 basis points on the deal. The spread on the first bond was 178 basis points over the 10-year PRC. The latest deal drew buyers not only from the conventional pack of pension funds, but also brokerages, investment funds, and mutual funds. "The spectrum was wide this time around," Prieto said.

Among other objectives, Bice structured the deal in the hopes of arbitraging between locally low rates and the higher yields affecting Chilean corporates abroad; Prieto noted that Endesa is still suffering from cross-border turmoil. The securitizer owns the collateral and has engaged in a cross-currency swap to hedge currency risk. The market is humming with talk of further cross-currency securitizations of Chilean bonds (See cover story).

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