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The Republic of Chile Announces New Notes Offerings and Tender Offer

The Republic of Chile Announces New Notes Offerings and Tender Offer

PR Newswire

SANTIAGO, Chile, June 13, 2017 /PRNewswire/ –

New Notes Offerings


The Republic of Chile (“Chile“) announced today the commencement of a global offering (the “Notes Offering“) of a series of global notes due 2047 to be denominated in U.S. dollars (the “USD Notes“), as well as a concurrent offering (the “Euro Offering“) of Chile’s 1.875% Notes due 2030, which will constitute a further issuance of, and will form a single series with, Chile’s outstanding 1.875% Notes due 2030 initially issued on May 27, 2015 (the “Reopening Euro Notes” and, together with the USD Notes, the “New Notes“). Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC or their affiliates will serve as Joint Lead Managers and Bookrunners for those offerings (collectively, the “New Notes Offerings“).

The New Notes Offerings are being made only by means of a prospectus supplement and an accompanying base prospectus under Chile’s registration statements (as amended) filed with the United States Securities and Exchange Commission (the “SEC“) under the Securities Act of 1933, as amended. Copies of the prospectus supplement and prospectus for the New Notes Offerings may be obtained by calling Citigroup Global Markets Inc. at 1-800-831-9146, Goldman Sachs & Co. LLC at 1-866-471-2526, HSBC Securities (USA) Inc. at 1-866-811-8049 or J.P. Morgan Securities LLC at 1-866-846-2874.

Chile intends to use the net proceeds of the sale of the USD Notes for general budgetary purposes and partially to pay the purchase price for certain outstanding debt securities of Chile that are validly tendered and accepted in the offer to purchase described below and the balance for general purposes of the government, and the net proceeds of the sale of the Euro Notes for general budgetary purposes of the government.

Application will be made to have the New Notes admitted to the Luxembourg Stock Exchange and admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange.

Tender Offer

Chile also announced today the commencement of an offer to purchase for cash (the “Tender Offer“) debt securities of each series listed in the table below (the “Old Notes” and each Old Notes, a “series” of Old Notes) such that the aggregate Purchase Price (as defined below) to be paid for the Old Notes tendered and accepted for purchase pursuant to the Tender Offer is equal to a maximum purchase amount to be determined by Chile in its sole discretion (the “Maximum Purchase Amount“). The terms and conditions of the Tender Offer are set forth in the Offer to Purchase, dated June 13, 2017 (the “Offer to Purchase“).

The Tender Offer is not conditioned upon any minimum participation of any series of Old Notes, but is conditioned on the pricing of the USD Notes in an amount, with pricing and on terms and conditions acceptable to Chile in its sole discretion.

The tender period (the “Tender Period“) will commence at 8:00 a.m., New York time, on Tuesday, June 13, 2016 and expire at 4:00 p.m, New York time, on the same day unless extended or earlier terminated. The settlement of the Tender Offer is scheduled to occur on Tuesday, June 20, 2017 (the “Tender Offer Settlement Date“). The purchase price to be paid for the Old Notes of each series tendered and accepted pursuant to the Tender Offer will be a purchase price to be determined in accordance with the procedures set forth in the Offer to Purchase using the fixed spread specified in the table below (the “Purchase Price“). Holders whose Old Notes are accepted in the Tender Offer will also receive any accrued and unpaid interest (the “Accrued Interest“) on their Old Notes up to (but excluding) the Tender Offer Settlement Date.

Old Notes

Outstanding Principal Amount as of June 12, 2017

ISIN

CUSIP

Common Code

Reference U.S. Treasury Security(1)

Bloomberg Screen

Fixed Spread (Basis Points)

Hypothetical Purchase Price (per US$1,000 Principal Amount)(2)

3.125% Global Notes due 2025

(“2025 Notes”)

US$758,262,000

US168863BW77

168863BW7

115193795

2.375% due May 2027

PX1

T+42 bp

US$1,035.00


3.625% Global Notes due 2042

(“2042 Notes”)

US$750,000,000

US168863BP27

168863BP2

085023837

3.00% due February 2047

PX1

T+65 bp

US$1,017.50

(1)The Dealer Managers will establish the U.S. Treasury Rate using the bid-side price of the Reference U.S. Treasury Security on the applicable Bloomberg Screen (set forth above) or using the actual U.S. Treasury Rate used to calculate the yield for the New Notes, as applicable, at or around the pricing of the New Notes.

(2)The Hypothetical Purchase Price for the Old Notes has been calculated using the bid-side price of the Reference U.S. Treasury Security on the Bloomberg Screen at 2:00 p.m., EST, on Monday, June 12, 2017.

During the Tender Period, a holder of Old Notes may place orders to tender Old Notes (“Tender Orders“) only through the Dealer Managers. Holders will NOT be able to submit tenders through the Euroclear Bank S.A./N.V., Clearstream Banking, soci t anonyme or The Depository Trust Company (“DTC“) systems. If a holder does not have an account with any Dealer Manager, such holder may place a tender offer through any broker, dealer, commercial bank, trust company, other financial institution or other custodian that it customarily uses. J.P. Morgan Securities LLC, as the billing and delivering bank for the Tender Offer (in such capacity, the “Billing and Delivering Bank“), will consolidate all Tender Orders and, upon instruction of Chile, accept Old Notes for purchase pursuant to the Tender Offer, subject to proration as described in the Offer to Purchase, prior to 8:00 a.m., New York time, on June 14, 2016 or as soon as possible thereafter. Each of Chile and the Billing and Delivering Bank reserves the right, in the sole discretion of each of them, not to accept any or all Tender Orders and to terminate the Tender Offer for any reason. Tender Orders by a holder of each series of Old Notes must be in Permitted Tender Amounts as set forth in the Offer to Purchase.

There is no letter of transmittal for the Tender Offer. Old Notes held through DTC must be delivered to any of the Dealer Managers for settlement no later than 3:00 p.m., New York time, on the Tender Offer Settlement Date. Failure to deliver Old Notes on time may result in (i) the cancellation of your tender and in you becoming liable for any damages resulting from that failure, and/or (ii) in the case of Preferred Tenders (as defined below), cancellation of any allocation of New Notes in the New Notes Offerings in respect of your related Indication of Interest and/or (iii) in the case of Preferred Tenders, in the cancellation of your tender and in your remaining obligation to purchase your allocation of New Notes in respect of your related Indication of Interest and/or (iv) in the delivery of a buy-in notice for the purchase of such Old Notes, executed in accordance with customary brokerage practices for corporate fixed income securities. Holders will not have withdrawal rights with respect to any tenders of Old Notes in the Tender Offer. Old Notes accepted for purchase will be settled on a delivery versus payment basis with the Billing and Delivering Bank on the Tender Offer Settlement Date in accordance with customary brokerage practices for corporate fixed income securities (i.e., a “desk to desk” or “broker to broker” trade).

If the aggregate Purchase Price would exceed the aggregate Purchase Price payable for the Maximum Purchase Amount and proration occurs, preference will be given to Tender Orders submitted by holders who place firm orders for New Notes prior to the pricing of the New Notes Offerings (“Preferred Tenders“). Such priority will apply, for each Preferred Tender, with respect to an amount of Tender Orders having a Purchase Price equal to the amount of New Notes ordered by such holder, subject to certain limits.

All Old Notes that are tendered pursuant to Tender Orders placed through a Dealer Manager and accepted will be purchased by the Billing and Delivering Bank. Only the Billing and Delivering Bank will be liable for the payment of the Purchase Price and Accrued Interest for Old Notes validly tendered and accepted. Chile will not be liable under any circumstances for any payment of the Purchase Price and Accrued Interest to the holders of Old Notes tendered in the Tender Offer. The Billing and Delivering Bank shall not be liable for payments to any holder of Old Notes validly tendered and accepted for purchase if such holder fails to deliver such Old Notes on or prior to the settlement of the Tender Offer as described in the Offer to Purchase. The Billing and Delivering Bank shall only have the obligation to sell to Chile the Old Notes validly tendered and accepted for purchase that the Billing and Delivering Bank has actually received pursuant to the Offer to Purchase on the Tender Offer Settlement Date. Tender Orders that are not for Permitted Tender Amounts will not be accepted.

The Tender Offer is subject to Chile’s right, at its sole discretion and subject to applicable law, to instruct the Dealer Managers to extend, terminate, withdraw or amend the Tender Offer at any time. Each of Chile and the Billing and Delivering Bank and the Dealer Managers reserves the right, in the sole discretion of each of them, not to accept tenders for any reason.

The Offer to Purchase may be downloaded from the Information Agent’s website at www.dfking.com/chile or obtained from the Information Agent, D.F. King & Co., Inc. in New York, 48 Wall Street, 22nd Floor, New York, NY 10005, (Banks and Brokers call collect: +1 (212) 269-5550; all others call Toll-Free: +1 (866) 796-1271) Attention: Michael Horthman (e‑mail: