Description

As from issue number 50, the Series of Economic Studies of the Central Bank of Chile will be called Studies in Economic Statistics.

Foreign borrowing is an important source of funding for Chilean companies, which might be reduced by financial crises causing liquidity squeeze in the markets. Therefore it is important to understand the characteristics of the Chilean corporate debt and how it was affected by the crisis. This document analyzes the Chilean corporate debt and how it was affected by the recent subprime and the European debt crisis, distinguishing between foreign direct investment companies (FDI) and non-FDI companies. The results show that for FDI companies which receive financing from related companies, borrowing was not affected. However, borrowing amounts and terms for non-FDI companies were reduced.