Parque Arauco Issues New Bond Worth US$240 Million, Completing Two Year Plan of Financial Strengthening

Parque Arauco S.A. (SSE: PARAUCO) (Bloomberg: PARAUCO:CI) has raised 6 million unidades de fomento (UF) (approximately US$ 240 million) through the issuance of a new bond. This issuance, the largest in the history of the company, was the result of a two year plan to strengthen Parque Arauco´s financial position.

In 2013 the company began preparing for a capital increase, which was executed during the first quarter of 2014 and subscribed to by more than 95% of shareholders. Later in 2014 the company started a process to lift all five banking and bond mortgages linked to its most important mall, Parque Arauco Kennedy. The process ended successfully with the completion of a bond tender and bond exchange, which offered unsecured “Series K” bonds, with a slight premium in the interest rate, in exchange for secured “Series H” bonds. Due to the capital increase, lifting of the mortgages and the company´s strong operational results, in 2014 Parque Arauco improved its local ratings by two levels, from A to AA-.

The financial strengthening process was completed last week, with the issuance of two series of local bonds, a UF + 2.2%, 5 year bullet bond for UF 2 million (approximately US$ 80 million) and a UF + 3.3% 25 year amortizing bond for UF 4 million (approximately US$ 160 million). Both were issued at historically low rates for a Chilean corporate bond.

Parque Arauco recently announced a new investment plan valued at US$ 730 million which will include developments in Chile, Peru and Colombia. Parque Arauco has 728.500 m2 of total GLA in Chile, Peru, and Colombia. The company inaugurated its first shopping center in Chile in 1982, entered Peru in 2006 and Colombia in 2008. The company´s assets include six regional shopping centers, three premium outlet malls and eleven strip centers in Chile; four regional shopping centers, five neighborhood centers, one premium outlet mall and one strip center in Peru; and two regional shopping centers in Colombia as well as a large land bank to support the company´s future growth plans. For more details, visit the company´s website: www.parauco.com.