Chile sustainability-linked bond: Optionality analysis

The AFII has said that: Chile’s recent SLB issuance (CHILE 4.34 03/2042; ISIN US168863DY16) was, in our view, constructedon a set of robust KPI’s – in our terminology a step-up priceable SLB (SUP) – where the separationof the two KPIs to individual step-ups is commended.1 The structure accounts for the trajectory ofGHG emissions rather than measuring a single point in time as Chile did with their carbon budgetwhich seems an interesting and sensible way to go...