• The instrument issued by the company was rated BBB+ by Fitch Ratings, whereas Moody’s rated it Baa1 equivalent.
• This financial milestone represents the largest placement of a green project bond in the instrument´s history in Latin America and the Caribbean.

With the purpose of refinancing the debt commitments acquired during the construction phase of the 2×500 kV Cardones – Polpaico Transmission Line, a key infrastructure to decarbonize the matrix and contribute to the climate change mitigation, ISA INTERCHILE issued this Monday its first green bond for USD 1.2 billion with a 35-year term.

The instrument listed on the Singapore Exchange Securities was rated long-term rating BBB+ by Fitch Ratings, whereas Moody’s rating was Baa1. In turn, the credit instrument presented by the electric power transmission company was evaluated by Sustainalytics, a specialized agency that certified to potential investors that this green bond complies with environmental, social and governance criteria (ESG).

Gabriel Melguizo, ISA INTERCHILE CEO, highlighted that the decision to issue this green bond “allows us not only to refinance commitments under favorable conditions of high liquidity and low rates, but it is also an important step to reinforce bonds with capital market and investors. It also reflects the level of maturity we have reached, and the trust we generate at the international level as a responsible Company with a long-term commitment with sustainable energy development of Chile, where energy transmission is the core of the much-wanted decarbonization of the country’s energy matrix.”

The Company´s Chief Financial Officer, Aquiles Vargas, explained that “this debt instrument is historical to our affiliate and to ISA, not only as it exceeded one billion dollars, but also for its high rating, granted by the main rating agencies and because of its ESG certification, which is of great importance in the current context of Climate Change. This also reflects the trust that our Company transmits to financial markets”.

It is worth noting that ISA Group has been a pioneer in the placement of this type of bonds. ISA CTEEP, The Company´s affiliate in Brazil, was the first energy transmission company to issue green debentures in Brazil for BRL 621 million, with an excess demand of 2.5 x. In Peru, the affiliate Consorcio Transmantaro was the first company to issue green bonds in the international capital market for USD 400 million, with 5.7 x over demand.

The Company mandated Scotiabank as Global Coordinator and J.P. Morgan and Goldman Sachs as Joint Bookrunners for coordination with investors and bond placement, whose papers reached USD 1.2 billion in the stock market with excess demand of more than 2.0 x and 4.5% interest rate. The Law Firms Barros & Errázuriz and Mayer Brown acted as consultants to the Company in this process.

“ISA INTERCHILE’s transaction was a decisive success, having a large demand of USD 2.5 trillion by more than 100 global investors in America, Europe and Asia, including investors in ESG and sustainable funds”, stated Carlos García, Director, Latin America, and the Caribbean Debt Capital Markets at Scotiabank. The executive added that “this iconic transaction reached important milestones for ISA INTERCHILE, being the largest issuance of green bonds of a project in the electric sector in Latin America, while having the lowest financing cost in dollars of any corporate project bond in the region and having the longest term in dollars”.

The 2×500 kV Cardones – Polpaico Transmission Line started operations in May 2019. In this stage, the inherent risks associated to the construction progress of a project of this magnitude decreased. Therefore, the Company decided to refinance the commitments held with financial institutions. This 753 km infrastructure, which includes 3 new substations, allowed for the interconnection to full capacity of the National Energy System and it is fundamental to comply with the decarbonization objectives, as it evacuates the unconventional renewable energy generated in the North of Chile towards the center of the country.