Forest Group Places Bonds in Chile

SIF Sociedad Inversora Forestal S.A. , an affiliate of Fundación Chile, has issued corporate bonds in the Chilean market. The funds generated by the bonds will be used to finance the development of long-term forestry projects on lots belonging to medium and small land owners, over which SIF Sociedad Inversora Forestal S.A. has acquired the right of usufruct Forestal Mininco S.A. and Forestal Millalemu S.A. were hired to cultivate and handle the forests.

This is the first time a bond with these features is issued in Chile. SIF Sociedad Inversora Forestal S.A. is a corporation whose only purpose is to develop the project financed with the bonds. Likewise, the bonds are guaranteed with mortgages on the usufruct rights, pledges over the forests and pledges on the agreements entered into with the forestry companies, resulting in a finance structure similar to a securitization.

The project will aggregate small and medium real estate lots for a joint development, taking advantage of the synergies produced by having large forestry companies in charge of the cultivation and handling of the forests.

Guerrero, Olivos, Novoa y Errázuriz, through partner Gonzalo Delaveau and associate José Miguel Ried, advised SIF Sociedad Inversora Forestal S.A. in the issuance of the bonds and coordination. Munzenmayer Abogados from Concepción, through partner Mario Munzenmayer advised SIF Sociedad Inversora Forestal S.A. regarding the usufruct agreements.