Caja Los Andes Raises Over US$130M Amid Falling UF Rates

Caja Los Andes successfully raised over US$130 million in the local market through a social bond indexed to inflation, taking advantage of receding UF interest rates. This favorable rate environment is linked to a global search for refuge due to the war in the Middle East.

Key points

• The bond, "BCAJDD1125" for UF 3 million, was placed at an interest rate of 2.89% with a 90 basis point spread.
• This spread would have resulted in a 2.97% interest rate at the end of February, before the Middle East crisis escalated.
• The new debt has a double-A credit rating and is structured as a bullet bond, with capital repayment due at maturity in late 2030.
• Global markets are showing declines due to increased risk aversion driven by oil supply disruptions following attacks on oil tankers.

Why it matters

The successful placement demonstrates that Chilean entities can still access significant funding by leveraging favorable conditions in inflation-indexed instruments, even while broader markets react negatively to geopolitical instability.