The partnership is intended to align Chile’s post-trade processes with international standards, as part of a financial integration agenda promoted by the country’s government.
Government bonds denominated and payable in pesos are now available to both domestic and international investors. Those sold cross-border—about 20 percent of the total issuance—have been settled through Euroclear’s account at the Chilean central securities depository, Deposito Central de Valores (DCV).
Rodrigo Valdés, Chile’s minister of finance, said: “Being able to tap into the liquidity provided by international investors is tremendously important for the continued development of our local market.”
“And, it should yield tangible benefits such as reducing the cost of borrowing, increasing liquidity in our local markets and furthering investment in our economy. By making our bonds Euroclearable, we have aligned our capital market infrastructure with the globally recognised standards that are synonymous with Euroclear’s robust, resilient and sound risk-management principles.”
Stephan Pouyat, global head of capital markets and fund services at Euroclear, commented: “The new regulatory framework, including the new tax treatment rule, enables Euroclear to extend its already well-developed Latin America offering and provide international investors with a simple, efficient and cost-effective way of accessing Chilean assets.”
Fernando Yañez, general manager of DCV, added: “Chilean sovereign bonds becoming Euroclearable is good news for the market, and represents a successful relationship with Euroclear. We are confident that Euroclear’s market participation will generate more demand for these bonds from international investors.”