Linklaters advises the Republic of Chile on landmark sovereign sustainability-linked bond offering

Linklaters has advised the Republic of Chile in connection with the SEC-registered offerings of $1.15 billion 4.950% Notes due 2036, $1.10 billion 5.330% Notes due 2054, and €750 million Notes due 2034.

The notes were issued pursuant to the Republic of Chile’s updated Sustainability-Linked Bond Framework, which the Republic of Chile adopted in June 2023.  In connection with the notes, the framework sets out goals with respect to two key performance indicators: (i) absolute greenhouse gas (GHG) emissions, and (ii) percentage of women on the boards of directors at companies that are under the scope of the Financial Market Commission.  The sustainability performance target for the first key performance indicator comprises two events: (i) achieving annual GHG emissions of 95 metric tons of carbon dioxide equivalent (MtCO2e) by December 31, 2030, and (ii) achieving a maximum GHG budget of 1,100 MtCO2e between January 1, 2020, and December 31, 2030. The sustainability performance target for the other key performance indicator comprises the following event: achieving at least 40.0% of women on the boards of directors at companies that are under the scope of the Financial Market Commission by December 30, 2031.

Under the terms of the U.S. dollar-denominated notes, from and including July 5, 2034, the interest rate payable on the notes will be increased unless the Republic of Chile has delivered an officer’s certificate to the trustee at least 30 days prior to such date certifying that each of the sustainability performance target events has been satisfied and the satisfaction thereof has been confirmed in the verification reports.  

Under the terms of the euro-denominated notes, an additional payment will be made at maturity or redemption unless the Republic of Chile has delivered an officer’s certificate to the trustee at least 30 days prior to July 5, 2023, certifying that each of the sustainability performance target events has been satisfied and the satisfaction thereof has been confirmed in the verification reports.

The Republic of Chile intends to use the net proceeds for general purposes of the government. 

The Linklaters team was led by partner Conrado Tenaglia and counsel Alejandro Gordano, alongside partner Gabriel Grossman (Tax), associates Juan Mata, Monica Perez Banuet, Mario Lercari and Matthew Russo (Tax), and summer associate Keisy Germosen.

Linklaters continues to be at the forefront of the growth in the green and social bonds market, with experience spanning the firm's Latin American, North American, European, and Asian offices.