(Recasts, adds detail on U.S. bond, background, finance minister comments)
SANTIAGO, Dec 3 (Reuters) - Chile raised $2 billion via a double bond placement on Wednesday, which Finance Minister Alberto Arenas said was the country’s biggest sovereign issue since it returned to democracy and international debt markets in 1990.
The South American country placed an 800 million euro bond, followed by a $1 billion U.S. dollar-denominated bond. Both were oversubscribed by between three and four times, said Arenas.
“The results we got in the issue again confirm the confidence international markets have in Chile’s economy, its stability,” Arenas said from New York in a video conference call.
The dollar portion of the trade priced at a spread of 90 basis points over U.S. Treasuries. Final terms on the euro tranche roughly translate into a spread of around 123 basis points over U.S. Treasuries, according to bankers cited by IFR, meaning that Chile ended up paying a premium to tap the euro market.
Chile’s sovereign dollar bond yield spreads trade at around 159 basis points over U.S. Treasuries, among the narrowest in emerging markets.
The cash raised in Wednesday’s issue will primarily be used to capitalize state copper firm Codelco, the government said.
Chile announced in August that it planned to give Codelco, the world’s biggest copper producer, around $3 billion via treasury-issued debt and around $1 billion from returned profits.
Codelco, which also issues its own debt, needs to spend around $23 billion through 2018 to upgrade its aging deposits and counteract falling ore grades.
Reporting by Felipe Iturrieta, Rosalba O'Brien and Anthony Esposito; Editing by James Dalgleish, Bernard Orr and Lisa Shumaker