Obligation Chili 3.875% ( US168863AV04 ) en USD

Chili

100 % ▼

Chili

US168863AV04 ( en USD )

3.875% par an ( paiement semestriel )

04/08/2020 - Obligation échue

Prospectus brochure de l'obligation Chile US168863AV04 en USD 3.875%, échue

100 000 USD

623 045 000 USD

168863AV0

N/A

Le Chili est un pays d'Amérique du Sud s'étendant sur une étroite bande de terre le long de la côte ouest du continent, connu pour ses paysages variés, allant du désert d'Atacama à la Patagonie glaciaire, et sa riche histoire et culture.

L'Obligation émise par Chili ( Chili ) , en USD, avec le code ISIN US168863AV04, paye un coupon de 3.875% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 04/08/2020

Final Prospectus Supplement
Page 1 of 159
424B2 1 d424b2.htm FINAL PROSPECTUS SUPPLEMENT
Table of Contents

Filed Pursuant to Rule 424(b)(2)
Registration No. 333-167534
Prospectus Supplement
To Prospectus Dated July 22, 2010

Republic of Chile
US$1,000,000,000
3.875% Notes due 2020
Issue price: 99.877%
Interest payable on February 5 and August 5 of each year.
The 3.875% Notes due 2020 (which we refer to as the notes) will mature on August 5, 2020. The notes will bear interest
at a rate of 3.875% per year. Interest on the notes is payable on February 5 and August 5 of each year, beginning February 5,
2011. The notes are not redeemable prior to maturity.
The notes will contain provisions regarding acceleration and future modifications to their terms. Under these provisions,
which are described in this prospectus supplement beginning on page S-19, Chile may amend the payment provisions and
certain other terms of the notes with the consent of the holders of 75% of the aggregate principal amount of the outstanding
notes.
The notes will be direct, general, unconditional, unsecured and unsubordinated external indebtedness of Chile and will
be backed by the full faith and credit of Chile. The notes will rank equal in right of payment with all of Chile's present and
future unsecured and unsubordinated external indebtedness.
Application has been made to list the notes on the official list of the Luxembourg Stock Exchange and to admit the notes
for trading on the Euro MTF market.
The underwriters expect to deliver the notes to purchasers on or about August 5, 2010.
Neither the Securities and Exchange Commission nor any state securities commission or regulatory body has
approved or disapproved of these securities or determined that this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Public Offering
Underwriting
Proceeds to Chile

Price
Discount

(before expenses)
Per note

99.877%(1)
0.100%

99.777%(1)
Total for notes

US$998,770,000
US$1,000,000
US$997,770,000
(1) Plus accrued interest, if any, from August 5, 2010.
Joint lead managers and bookrunners

Citi
HSBC
J.P. Morgan

July 29, 2010
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Table of Contents
We are responsible for the information contained in this prospectus supplement and the accompanying
prospectus and in any related free-writing prospectus we prepare or authorize. We have not authorized anyone to
give you any other information, and we take no responsibility for any other information that others may give you.
TABLE OF CONTENTS

Prospectus Supplement

About This Prospectus Supplement

S-3
Certain Defined Terms and Conventions

S-3
Summary of the Offering

S-4
Recent Developments

S-5
Use of Proceeds
S-17
Description of the Notes
S-17
Underwriting
S-21
Validity of the Notes
S-24
General Information
S-25
Prospectus
About this Prospectus

1
Certain Defined Terms and Conventions

2
Forward-Looking Statements

4
Data Dissemination

4
Use of Proceeds

4
Summary

5
Republic of Chile

7
The Economy

15
Balance of Payments and Foreign Trade

43
Monetary and Financial System

52
Public Sector Finances

74
Public Sector Debt

91
Description of the Securities

100
Taxation

114
Plan of Distribution

117
Official Statements

119
Validity of the Securities

119
Authorized Representative

119
General Information

120
Tables and Supplemental Information

121

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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement supplements the accompanying prospectus dated July 22, 2010, relating to Chile's debt
securities and warrants. If the information in this prospectus supplement differs from the information contained in the
accompanying prospectus, you should rely on the updated information in this prospectus supplement.
You should read this prospectus supplement along with the accompanying prospectus. Both documents contain
information you should consider when making your investment decision. You should rely only on the information provided
in this prospectus supplement and the accompanying prospectus. Chile has not authorized anyone else to provide you with
different information. Chile and the underwriters are offering to sell the notes and seeking offers to buy the notes only in
jurisdictions where it is lawful to do so. The information contained in this prospectus supplement and the accompanying
prospectus is current only as of their respective dates.
Chile is furnishing this prospectus supplement and the accompanying prospectus solely for use by prospective investors
in connection with their consideration of a purchase of the notes. Chile confirms that:

· the information contained in this prospectus supplement and the accompanying prospectus is true and correct in all

material respects and is not misleading as of its date;

· it has not omitted facts, the omission of which makes this prospectus supplement and the accompanying prospectus

as a whole misleading; and

· it accepts responsibility for the information it has provided in this prospectus supplement and the accompanying

prospectus.
CERTAIN DEFINED TERMS AND CONVENTIONS
Defined Terms
Terms used but not defined in this prospectus supplement have the meanings ascribed to them in the accompanying
prospectus dated July 22, 2010.
Currency of Presentation
Unless otherwise stated, Chile has converted historical amounts translated into U.S. dollars ("U.S. dollars", "dollars" or
"US$") or pesos ("pesos," "Chilean pesos" and "Ps.") at historical annual average exchange rates. Translations of pesos to
dollars have been made for the convenience of the reader only and should not be construed as a representation that the
amounts in question have been, could have been or could be converted into dollars at any particular rate or at all.

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SUMMARY OF THE OFFERING
This summary highlights information contained elsewhere in this prospectus supplement and the accompanying
prospectus. It is not complete and may not contain all the information that you should consider before investing in the notes.
You should read the entire prospectus supplement and prospectus carefully.

Issuer
The Republic of Chile.
Aggregate Principal Amount
US$1,000,000,000
Issue Price
99.877% plus accrued interest, if any, from August 5, 2010.
Maturity Date
August 5, 2020.
Form of Securities
Chile will issue the notes in the form of one or more registered global
securities without coupons.

Denominations
Chile will issue the notes in denominations of US$100,000 and integral
multiples of US$1,000 in excess thereof.
Interest
The notes will bear interest from August 5, 2010 at the rate of 3.875% per
year. Chile will pay interest semi-annually, on February 5 and August 5 of
each year, commencing on February 5, 2011.
Redemption
Chile may not redeem the notes before the maturity date. At the maturity
date, Chile will redeem the notes at par.
Status
The notes will be direct, general, unconditional, unsecured and
unsubordinated external indebtedness of Chile and will be backed by the full
faith and credit of Chile. The notes will rank equal in right of payment with
all of Chile's present and future unsecured and unsubordinated external
indebtedness.
Withholding Tax and Additional Amounts Chile will make all payments on the notes without withholding or deducting
any taxes imposed by Chile or any political subdivision thereof or taxing
authority therein, subject to certain specified exceptions. For more
information, see "Description of the Securities--Debt Securities--Additional
Amounts" on page 102 of the accompanying prospectus.
Taxation
For a general summary of United States federal income tax consequences
resulting from the purchase, ownership and disposition of a note, holders
should refer to the discussion set forth under the heading "Taxation--United
States Federal Taxation" in the accompanying prospectus.
Further Issues
Chile may from time to time, without your consent, increase the size of the
issue of the notes, or issue additional debt securities that may be consolidated
and form a single series with the outstanding notes.
Listing
Application has been made to list the notes on the official list of the
Luxembourg Stock Exchange and to admit the notes for trading on the Euro
MTF market.
Governing Law
New York.

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RECENT DEVELOPMENTS
The information included in this section supplements the information about Chile corresponding to the headings below
that is contained in the accompanying prospectus dated July 22, 2010. To the extent that the information included in this
section differs from the information set forth in the accompanying prospectus, you should rely on the information in this
section.
Selected Financial Information(1 )

As of March 31,

2009

2010(6)
THE ECONOMY

Gross Domestic Product (GDP)(2 )

35,189
46,579
Real GDP (in billions of pesos)(3)

15,751
15,916
% Change respect the same quarter of previous year

(2.1)%
1.0%
Consumer price index (quarterly rate of change)

(0.7)%
0.9%
Wholesale price index (quarterly rate of change)

(7.8)%
1.6%
Unemployment rate (quarterly average)

9.2%
9.0%
Balance of payments:

Trade balance

2,622
4,679
Current account

889
1,523
Financial and capital account (including change in reserves)

(17)
(428)
Errors and omissions

(872)
(1,095)
Central Bank net international reserves (period-end)

23,382
25,631
Number of months of import coverage

2.6
2.2
PUBLIC FINANCE

Central government revenue

7,376
10,224
% of GDP(4)

21.0%
21.9%
Central government expenditure

8,406
10,305
% of GDP(4)

23.9%
22.1%
Central government surplus/(deficit)

(1,030)
(81)
% of GDP(4)

(2.9)%
(0.2)%
PUBLIC DEBT

Central government external debt

2,909
2,507
Central government external debt/GDP(5)

1.8%
1.3%

(1)
In millions of U.S. dollars, except as otherwise indicated.
(2)
GDP in U.S. dollars calculated by translating the nominal GDP in pesos at the average exchange rate of each

period.

(3)
Calculated using constant 2003 pesos.

(4)
Calculated on the basis of corresponding first quarter GDP.
(5)
Calculated on the basis of full year corresponding GDP for 2009 and estimated full year corresponding GDP

for 2010.

(6)
Preliminary.
Source: Central Bank, Budget Office and National Statistics Institute.

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Republic of Chile
Earthquake and Tsunami of February 27, 2010
On July 14, 2010, the Chilean Congress approved the government's post-earthquake reconstruction finance bill, which is
currently pending enactment by the President.
The Economy
Recent Macroeconomic Performance
In the first quarter of 2010, domestic output and demand grew at an annual rate of 1.0% and 11.1%, respectively,
compared to a contraction of 2.1% and 6.6%, respectively, during the first quarter of 2009. On a quarterly basis, output
decreased 1.5% and demand rose 4.2% compared to the fourth quarter of 2009. This contraction in output was largely caused
by the 2010 earthquake and tsunami's effect on industrial output, which had a greater adverse effect than initially estimated.
Demand rose largely due to increases in durable goods orders and consumer and capital goods imports, reflecting a
significant increase in retail consumption.
In the first quarter of 2010, total imports grew by 28.6% compared to the same period in 2009 largely due to their
substitution for local production, which declined as a result of the February 2010 earthquake and tsunami.
The following table sets forth information regarding Chile's recent macroeconomic performance for the periods
indicated:
Chilean Macroeconomic Performance

Domestic
Current Account
GDP Growth
Demand Growth
First Quarter

(in millions of US$)
(in %)(2)
(in %)(2)
2009

889.3
(2.1)%
(6.6)%
2010(1)

1,522.9
1.0%
11.1%

(1)
Preliminary.

(2)
Compared to the first quarter of the previous year.
Source: Central Bank.
Gross Domestic Product
In the first quarter 2010, GDP rose by 1.0%, compared to the same period of 2009, primarily due to an 11.1% increase
in aggregate domestic demand and a 9.3% expansion in gross fixed capital investment.

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The following tables set forth GDP and expenditure for the periods indicated:
GDP and Expenditure at current prices
(in billions of pesos)

First
First
Quarter
Quarter
%

2009
2010(1)
Change
GDP

21,363
24,174
13.2%

Aggregate Domestic Demand

19,831
21,874
10.3%

Gross Fixed Capital Investment

4,749
5,002
5.3%
Change in Inventories

(527)
168
*
Total Consumption

15,609
16,704
7.0%
Private Consumption

13,097
13,912
6.2%
Government Consumption

2,512
2,792
11.1%
Total Exports

8,466
9,718
14.8%

Exports of Goods

6,966
8,402
20.6%
Exports of Services

1,500
1,316
(12.3)%
Total Imports

6,933
7,417
7.0%

Imports of Goods

5,807
6,375
9.8%
Imports of Services

1,126
1,042
(7.5)%
Net Exports

1,533
2,301
50.1%

*
Not meaningful.

(1)
Preliminary.
Source: Central Bank.
GDP and Expenditure at constant prices
(in billions of constant 2003 pesos)

First
First
Quarter
Quarter
%

2009
2010(1)
Change
GDP

15,751
15,916
1.0%

Aggregate Domestic Demand

15,824
17,577
11.1%

Gross Fixed Capital Investment

3,833
4,191
9.3%
Change in Inventories

(433)
154
*
Total Consumption

12,424
13,232
6.5%
Private Consumption

10,573
11,371
7.5%
Government Consumption

1,851
1,861
0.5%
Total Exports

6,409
6,023
(6.0)%

Exports of Goods

5,160
4,840
(6.2)%
Exports of Services

1,249
1,183
(5.3)%
Total Imports

6,482
7,683
18.5%

Imports of Goods

5,410
6,603
22.0%
Imports of Services

1,072
1,080
0.8%
Net Exports

(73)
(1,661)
2,175.3%

*
Not meaningful.

(1)
Preliminary.
Source: Central Bank.

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Composition of Demand
In the first quarter of 2010, the primary component of aggregate demand was private consumption, which increased to
71.4% of GDP compared to 67.1% of GDP in the first quarter of 2009, mainly as a result of an increase in the demand for
durable goods. Gross fixed capital investment increased from 24.3% of GDP in the first quarter of 2009 to 26.3% of GDP in
the first quarter 2010.
The following table sets forth GDP by categories of aggregate demand for the period indicated:
GDP by Aggregate Demand
(percent of total GDP at constant 2003 pesos)

First
First
Quarter
Quarter

2009
2010(1)

Real GDP in billions of 2003 pesos

Ps.15,751
Ps.15,916
Domestic Absorption

103.2%
109.5%
Private Consumption

67.1%
71.4%
Government Consumption

11.8%
11.7%
Gross Fixed Capital Investment

24.3%
26.3%
Exports of goods and services

40.7%
37.8%
Imports of goods and services

41.2%
48.3%

(1) Preliminary.
Source: Central Bank.
Employment and Labor
During the first quarter of 2010, the unemployment rate was 9.0%, compared to 9.2% during the first quarter of 2009
and an annual rate of 9.7% in 2009. The participation rate was 57.7% during the first three months of 2010, compared to
56.0% during the first quarter of 2009 and an annual rate of 55.9% in 2009. The following table sets forth information on
employment and the labor force in Chile for the period indicated:
Employment and Labor
(in thousands)

First
First
Quarter
Quarter

2009

2010
Nationwide:(1)

Labor force

7,277
7,614
Employment

6,608
6,926
Participation rate

56.0%
57.7%
Unemployment rate

9.2%
9.0%
Santiago:

Labor force

2,842
2,842
Employment

2,478
2,536
Participation rate

59.7%
58.9%
Unemployment rate

12.8%
10.8%
(1) Data derived based on the new criteria in the National Statistics Institute (Instituto Nacional de

Estadísticas--INE) survey introduced in January 2010 for the collection of employment data.
Source: INE and University of Chile surveys.

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Poverty, Income Distribution and Social Reforms
Every three years, the Ministry of Planning and Cooperation (Ministerio de Planificación y Cooperación) prepares a
national Social and Economic Survey, which is a comprehensive report on changes in poverty, income distribution and the
implementation of the government's social development plans. The 2009 Social and Economic Survey, containing data
collected in November 2009, was published in July 2010.
For the first time since 1990, the 2009 Social and Economic Survey showed an increase in the percentage of the
population living with a per capita income below the poverty line compared to the prior survey.
The President has announced a series of measures in an attempt to reverse this trend, including encouraging education,
improving social spending efficiency, creating an ethical family income (ingreso ético familiar) and other financial support
mechanisms intended to augment the monthly incomes of families. In addition, the government plans to present to Congress a
bill transforming the Ministry of Planning and Cooperation into a Ministry of Social Development (Ministerio de Desarrollo
Social), which would have the responsibility and related resources to oversee the execution of social programs. The
government also has plans to increase the frequency of the Social and Economic Surveys.
Notwithstanding the relative increase in poverty observed in 2009 as compared to 2006, poverty levels were
significantly lower in 2009 than they were in 1990. According to the 2009 Social and Economic Survey, the percentage of the
population living with a per capita income below the poverty line fell from 38.6% in 1990 to 15.1% in 2009. This reduction
can be attributed to strong GDP growth, rising wages, a rapidly increasing employment rate and a significant increase in
government transfers and expenditures focused on low-income groups.
The following table presents information regarding the evolution of poverty for the periods indicated:
Poverty 1990-2009
(% of Population)

Extreme
Total
Year

Poverty
Poverty(1)
1990

13.0
38.6
1992

9.0
32.9
1994

7.6
27.6
1996

5.7
23.2
1998

5.6
21.7
2000

5.6
20.2
2003

4.7
18.7
2006

3.2
13.7
2009

3.7
15.1

(1) Total poverty includes extreme poverty.
Source: Ministry of Planning and Cooperation--Social and Economic Survey.
The reduction in poverty can also be attributed to the government's emphasis on social assistance programs, which
allocate funds to poor communities based on their needs. These social programs contributed to a decrease in extreme poverty
from 13.0% in 1990 to 3.7% in 2009.
Health System Reform
In July 2010, Chile's public health care system, known as Plan Auge, was expanded to increase coverage at low or zero
co-payments for an additional thirteen priority ailments, bringing the total number of covered pathologies from 56 to 69.

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Balance of Payments and Foreign Trade
Balance of Payments
The following table sets forth Chile's Balance of Payments for the period indicated:
Balance of Payments
(in millions of US$)

First Quarter 2009
First Quarter 2010
Current account

Current account, net
US$
889
US$
1,523

Goods and Services, net
2,551
4,480
Merchandise Trade Balance
2,622
4,679
Exports
11,482
16,241
Imports
(8,860)
(11,562)
Services
(71)
(198)
Credits
2,365
2,359
Debits
(2,436)
(2,557)
Interest, net
(1,935)
(4,417)
Employee compensation
0
0
Interest from investment
(1,935)
(4,417)
Interest from direct investment(1)
(2,137)
(4,265)
Abroad
673
693
From abroad
(2,811)
(4,957)
Interest from portfolio investment
229
108
Dividends
208
218
Interest
20
(110)
Interest from other investment
(26)
(260)
Credits
194
100
Debits
(220)
(360)
Current transfers, net
273
1,459
Credits
466
1,719
Debits
(193)
(260)
Capital and financial accounts

Capital and financial accounts, net
(17)
(428)

Capital account, net
3
4,143
Financial account, net
(20)
(4,571)
Direct investment, net
1,599
3,759
Direct investment abroad
(2,256)
(1,949)
Shares and other capital
(1,268)
(1,025)
Earnings reinvested
(637)
(552)
Other capital
(350)
(372)
Direct investment to Chile
3,855
5,708
Shares and other capital
1,300
1,600
Earnings reinvested
2,445
3,615
Other capital(2)
110
493
Portfolio investment, net
411
(2,476)
Assets
(911)
(3,526)
Liabilities
1,323
1,050
Derived financial instruments, net
251
(424)
Other Investment, net(3)
(1,822)
(4,576)
Assets
(1,065)
(5,026)
Commercial credits
(647)
(1,221)
Loans
50
95
Currency and deposits
(468)
915
Other assets
0
(4,814)
Liabilities
(757)
450
Commercial credits
(2,085)
5
Loans(2)
1,301
421
Currency and deposits
35
25
Other liabilities
(7)
(2)
Assets in reserve, net
(460)
(856)
Errors and omissions, net
(872)
(1,095)

Financial account without reserves
443
428

Total balance of payments
US$
460
US$
856

(1) Includes interest.
(2) Net flows of liabilities by loans.
(3) Short term net flows.
Source: Central Bank.

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