SANTIAGO, Chile Chile's Rutas del Pacfico SA, a road construction company, will issue a $306 million bond, with payments covered by the Inter-American Development Bank (IDB) and co-insurers. As a result, the IDB signed it's first-ever private sector guarantee with the President of Chile, Ricardo Lagos Escobrar, late last week.
The credit guarantee will help to improve and expand Chile's 68-mile highway that connects Santiago and Valparso, the country's main port.
The IDB will be able to provide credit enhancement by investing domestic savings from Chile's pension fund system into the infrastructure.
The private sector of the bank was opened in 1995 to provide loans and guarantees for infrastructure projects. Additionally, the IDB has previously provided partial guarantees for political risk.