BCI Chilean AT1 welcomed

Banco de Crédito e Inversiones (BCI) impressed with its second Additional Tier 1 transaction on Thursday, as the $500m deal attracted a $1.45bn final order book and strengthened the Chilean AT1 track record in the international market.

The bank — one of the leading financial institutions in Chile and Florida — held investor meetings with over 50 accounts in New York and Chile on Tuesday and Wednesday, building on work done around a $500m debut in February with a credit update.

Initial price thoughts for the perpetual non-call 10.25 Reg S/144A issue, expected ratings Ba1/BB+ (Moody’s/S&P), were then set at the 7.875% area, taking into account feedback and the issuer’s secondary AT1 level, and with an encouraging $300m of indications of interest.

Demand peaked at $1.75bn, including triple-digit orders, allowing for pricing to be tightened to 7.5%, roughly flat to fair value, and for the target size of $500m (CLP466bn) to be achieved, while the reset spread was 375.6bp, relative to the context of 325bp-350bp for European banks.

The final book was $1.45bn, taking in emerging market and crossover investment grade buyers, given the high double-B ratings, and including international accounts alongside Chilean and other Latin American investors.

BCI’s $500m debut in February inaugurated the international market for Chilean AT1s and its new issue is the third from the country, with Banco Estado having issued a $600m deal in April.

“Three highly successful AT1 deals in the space of nine months are the crowning achievement for more than five years of hard work by the Chilean banks, government and regulators to introduce Basel III and AT1s in Chile, and a testament to the sterling reputation of the country’s banks in the international debt capital markets,” said Doncho Donchev, executive director, DCM Solutions, Credit Agricole CIB, joint bookrunner for the new issue and for Banco Estado’s AT1.