CHILE Law and Practice Contributed by: Macarena Ravinet and Federico Espinosa, Cuatrecasas
may impose conditions such as notice periods, con- sents, or breakage costs. For publicly offered debt securities, buybacks must comply with securities regulations, including disclosure and equal treatment of bondholders, and are typically executed via tender or exchange offers reported to the Comisión para el Mercado Financiero . Debt buybacks are a recognised liability management tool, subject to contractual and, for public securities, regulatory requirements. 3.8 Public Acquisition Finance Chilean law does not formally regulate “certain funds” as in the UK; instead, deal certainty in public acquisi- tion finance is achieved through contractual undertak- ings. Financing commitments are structured to remain available at closing, subject to certain conditions, including the accuracy of representation, legality, and proper execution. In private deals, tailored conditions precedent and commitment letters allocate risk, with documentation adapted from international standards to meet local requirements. Security interests must be registered to be effec- tive against third parties, though full agreements are not publicly filed. No Chilean case law specifically addresses certain funds; contractual practice prevails. 3.9 Recent Legal and Commercial Developments Recent legal and commercial developments in Chile have necessitated adjustments to financing documen- tation. ESG There is a growing focus on ESG and sustainability- linked finance. Agreements increasingly incorporate sustainability-linked covenants, reporting obliga- tions, and key performance indicators. The Chilean Taxonomy for Environmentally Sustainable Economic Activities now provides clear criteria for green pro- jects, influencing disclosure standards in financing contracts. Data Protection and Cybersecurity The recent approval of Chile’s new Data Protection Law (inspired by the EU’s GDPR) and the Cybersecu- rity Framework Law have required parties to address
data privacy and information security in their legal documentation. Key changes include: • clauses on the lawful processing, storage, and transfer of personal data, with explicit consent requirements and data minimisation principles; • obligations to notify lenders and regulators of data breaches or cybersecurity incidents, and • warranties regarding the implementation of robust cybersecurity policies and compliance with regula- tory standards. Enhanced AML and Economic Crime Regulations Recent reforms have expanded the scope of AML and economic crime legislation, increasing the number of predicate offences and strengthening corporate crimi- nal liability. Legal documentation has been updated to include: • broader representations and covenants regarding compliance with AML, anti-corruption, and anti- terrorism financing laws; • enhanced KYC (know-your-customer) and ongoing monitoring obligations; • termination rights and indemnities in the event of breaches of these obligations. New Lenders On the commercial side, the increased participation of non-bank lenders and private credit funds has led to the inclusion of more flexible intercreditor arrange- ments and transfer provisions, reflecting international practice. At the same time, rising interest rates and inflationary pressures have prompted parties to rene- gotiate margin adjustment mechanisms and prepay- ment provisions to manage volatility. 3.10 Usury Laws Legal Framework Chilean law strictly regulates the maximum interest rates that can be charged on credit operations, as out- lined in Law No 18,010, which governs credit transac- tions and other monetary obligations. The law’s pri- mary objective is to protect borrowers from excessive or abusive interest rates, ensuring transparency and fairness in the lending market.
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