1) Taking advantage of the conditions presented by the debt market, National Copper Co. (Codelco in Chile) today carried out an operation in New York city that will allow it to further strengthen its liquidity, to face the current market uncertainty and, at the same time, continue to complete the financing of its structural projects . In this way, Codelco carried out this morning in New York a successful placement of bonds for US$800 million with an 11-year term with a yield of 3.77%. The rate obtained represents a differential of 315 basis points over the US Treasury bond of similar term. This is the first issuance by a Chilean company in this market since the Covid 19 pandemic was declared. More than 320 orders were received and a demand of more than US$ 10 billion, the highest Codelco has had in its history, which shows the confidence of investors in the plans of the Corporation and into Chile.

Keys data:

Currency USD

Coupon rate 3,75% (annual rate)

Coupon frequencybiannual

Present Price 99,816% under par bonus

Price date April 29, 2020

Payment date first Coupon January15, 2021

Maturity date January 15, 2031

Considering the previous article and keys data:

a) Estimate the price that these bonds issued by Codelco would have on July 1, 2021, if the current yield is maintained until that date. Explain your answer with assumptions

b) Why does rate obtained by Codelco turn out to be 3.15% higher than an American Treasury bond with a similar term, as the article expresses when talking about the base point spread?

c) Suppose that the AFPs (Pension Fund Manager in Chile) bought Codelco' bonds in this issue for their funds named "D" and "E". How would an announcement of a reduction in the monetary policy rate and greater monetary stimulus by the Central Bank of Chile affect the profitability of these funds?