SANTIAGO: Chile tapped debt markets with a social bond, one of the first sales by emerging market sovereigns in what’s expected to be a slower second half of the year after a flurry of activity in early 2024.

The South American nation sold US$1.7bil of notes due in 2031 at a spread of 105 basis points over mid-swaps, according to a person familiar with the matter who asked not to be identified.

That compares with the initial price talk of around 130 basis points.

“The size of the issuance was a bit of a surprise, but the transaction is in line with Chile’s goals to diversify its bond offerings,” said William Snead, an analyst at Banco Bilbao Vizcaya Argentaria SA in New York.

Government and corporate borrowers in developing markets issued US$321bil of debt in the busiest first half of a year since 2021.

JPMorgan Chase & Co and Bank of America Corp expect sales to slow more than usual going forward as political risk is likely to fuel volatility.

Chile last tapped global debt markets back in January, when it sold US$1.7bil of notes due in five years at a spread of 85 basis points over similar US treasuries.

That sale had represented the entire US dollar issuance targeted for the year.

 - Bloomberg