NOTE 18
ISSUED DEBT INSTRUMENTS AND OTHER FINANCIAL LIABILITIES
As of December 31, 2017 and 2016, composition of this item is as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Other financial liabilities | |||
| Obligations to public sector | 59,470 | 61,490 | |
| Other domestic obligations | 175,389 | 175,028 | |
| Foreign obligations | 7,171 | 3,498 | |
| Subtotals | 242,030 | 240,016 | |
| Issued debt instruments | |||
| Mortgage finance bonds | 34,479 | 46,251 | |
| Senior bonds | 6,186,760 | 6,416,274 | |
| Mortgage bond | 99,222 | 104,182 | |
| Subordinated bonds | 773,192 | 759,665 | |
| Subtotals | 7,093,653 | 7,326,372 | |
| Total | 7,335,683 |
7,566,388 | |
Debts classified as current are either demand obligations or will mature in one year or less. All other debts are classified as non-current. The Bank’s debts, both current and non-current, are summarized below:
| As of December 31, 2017 | |||||
| Current | Non-current | Total | |||
| MCh$ | MCh$ | MCh$ | |||
| Mortgage finance bonds | 8,691 | 25,788 | 34,479 | ||
| Senior bonds | 337,166 | 5,849,594 | 6,186,760 | ||
| Mortgage bond | 4,541 | 94,681 | 99,222 | ||
| Subordinated bonds | 3 | 773,189 | 773,192 | ||
| Issued debt instruments | 350,401 | 6,743,252 | 7,093,653 | ||
| Other financial liabilities | 212,825 | 29,205 | 242,030 | ||
| Total | 563,226 | 6,772,457 | 7,335,683 | ||
| As of December 31, 2016 | ||||
| Current | Non-current | Total | ||
| MCh$ | MCh$ | MCh$ | ||
| Mortgage finance bonds | 11,236 | 35,015 | 46,251 | |
| Senior bonds | 1,135,713 | 5,280,561 | 6,416,274 | |
| Mortgage bond | 4,318 | 99,864 | 104,182 | |
| Subordinated bonds | 4 | 759,661 | 759,665 | |
| Issued debt instruments | 1,151,271 | 6,175,101 | 7,326,372 | |
| Other financial liabilities | 158,488 | 81,528 | 240,016 | |
| Total | 1,309,759 | 6,256,629 | 7,566,388 | |
a) Mortgage finance bonds
These bonds are used to finance mortgage loans. Their principal amounts are amortized on a quarterly basis. The range of maturities of these bonds is between five and twenty years. Loans are indexed to UF and create a yearly interest yield of 5.41% as of December 31, 2017 (5.53% as of December 31, 2016).
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Due within 1 year | 8,691 | 11,236 | |
| Due after 1 year but within 2 years | 6,744 | 8,673 | |
| Due after 2 year but within 3 years | 6,096 | 6,928 | |
| Due after 3 year but within 4 years | 5,155 | 6,246 | |
| Due after 4 year but within 5 years | 4,101 | 5,278 | |
| Due after 5 years | 3,692 | 7,890 | |
| Total mortgage bonds | 34,479 | 46,251 | |
b) Senior bonds
The following table shows senior bonds by currency:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Santander bonds in UF | 3,542,006 | 3,588,373 | |
| Santander bonds in USD | 1,045,465 | 909,354 | |
| Santander bonds in CHF | 268,281 | 568,549 | |
| Santander bonds in Ch$ | 1,135,527 | 1,037,515 | |
| Santander bonds in AUD | 14,534 | 60,890 | |
| Current bonds in JPY | 126,059 | 179,426 | |
| Santander bonds in EUR | 54,888 | 72,167 | |
| Total senior bonds | 6,186,760 | 6,416,274 | |
i. Placement of senior bonds:
In 2017, the Bank issued bonds for UF 10,000,000; CLP 160,000,000,000; USD 770,000,000; and AUD 30,000,000 detailed as follows:
| Series | Currency | Amount | Term | Issuance rate | Series approval date | Series amount | Maturity date |
| T9 | UF | 5,000,000 | 7.0 | 2.60% | 01-02-2016 | 5,000,000 | 01-02-2024 |
| T13 | UF | 5,000,000 | 9.0 | 2.75% | 01-02-2016 | 5,000,000 | 01-02-2026 |
| Total | UF | 10,000,000 | 10,000,000 | ||||
| SD | CLP | 60,000,000,000 | 5.0 | 5.50% | 01-06-2014 | 200,000,000,000 | 01-06-2019 |
| T16 | CLP | 100,000,000,000 | 6.0 | 5.20% | 01-02-2016 | 100,000,000,000 | 01-08-2021 |
| Total | CLP | 160,000,000,000 | 300,000,000,000 | ||||
| DN | USD | 100,000,000 | 3.0 | Libor-USD 3M+0.80% | 20-07-2017 | 100,000,000 | 27-07-2020 |
| DN | USD | 50,000,000 | 3.0 | Libor-USD 3M+0.80% | 21-07-2017 | 50,000,000 | 27-07-2020 |
| DN | USD | 50,000,000 | 3.0 | Libor-USD 3M+0.80% | 24-07-2017 | 50,000,000 | 27-07-2020 |
| DN | USD | 10,000,000 | 4.0 | Libor-USD 3M+0.83% | 23-08-2017 | 10,000,000 | 23-11-2021 |
| DN | USD | 10,000,000 | 4.0 | Libor-USD 3M+0.83% | 23-08-2017 | 10,000,000 | 23-11-2021 |
| DN | USD | 50,000,000 | 3.0 | Libor-USD 3M+0.75% | 14-09-2017 | 50,000,000 | 15-09-2020 |
| DN | USD | 500,000,000 | 3.0 | 2.50% | 12-12-2017 | 500,000,000 | 15-12-2020 |
| Total | USD | 770,000,000 | 770,000,000 | ||||
| AUD | AUD | 30,000,000 | 10.0 | 3.96% | 05-12-2017 | 30,000,000 | 12-12-2027 |
| Total | AUD | 30,000,000 | 30,000,000 |
During 2017, the Bank performed a partial repurchase of the following bonds:
| Date | Type | Currency | Amount |
| 06-03-2017 | Senior | USD | 6,900,000 |
| 12-05-2017 | Senior | UF | 1,000,000 |
| 16-05-2017 | Senior | UF | 690,000 |
| 17-05-2017 | Senior | UF | 15,000 |
| 26-05-2017 | Senior | UF | 340,000 |
| 01-06-2017 | Senior | UF | 590,000 |
| 02-06-2017 | Senior | UF | 300,000 |
| 05-06-2017 | Senior | UF | 130,000 |
| 19-06-2017 | Senior | UF | 265,000 |
| 10-07-2017 | Senior | UF | 770,000 |
| 21-07-2017 | Senior | UF | 10,000 |
| 28-08-2017 | Senior | UF | 200,000 |
| 28-08-2017 | Senior | UF | 200,000 |
| 29-08-2017 | Senior | UF | 2,000 |
| 29-08-2017 | Senior | UF | 270,000 |
| 03-11-2017 | Senior | UF | 14,000 |
| 29-11-2017 | Senior | UF | 400,000 |
| 06-12-2017 | Senior | UF | 20,000 |
| 12-12-2017 | Senior | CLP | 10,990,000,000 |
In 2016, the Bank issued bonds for UF 62,000,000; CLP 590,000,000,000; JPY 3,000,000,000; USD 215,000,000; EUR 104,000,000; and CHF 125,000,000 detailed as follows:
| Series | Currency | Amount | Term | Issuance rate | Series approval date date | Series maximum amount | Maturity date |
| R1 | UF | 15,000,000 | 5.5 | 2.50% | 01-09-2015 | 15,000,000 | 01-03-2021 |
| R2 | UF | 10,000,000 | 7.5 | 2.60% | 01-09-2015 | 10,000,000 | 01-03-2023 |
| R3 | UF | 10,000,000 | 10.5 | 3.00% | 01-09-2015 | 10,000,000 | 01-03-2026 |
| R5 | UF | 7,000,000 | 7.0 | 2.55% | 01-12-2015 | 7,000,000 | 01-12-2022 |
| R6 | UF | 7,000,000 | 9.0 | 2.65% | 01-12-2015 | 7,000,000 | 01-12-2024 |
| P9 | UF | 3,000,000 | 10.5 | 2.60% | 01-03-2015 | 5,000,000 | 01-09-2025 |
| T2 | UF | 5,000,000 | 4.5 | 2.25% | 01-02-2016 | 5,000,000 | 01-08-2020 |
| T5 | UF | 5,000,000 | 6.0 | 2.40% | 01-02-2016 | 5,000,000 | 01-02-2022 |
| Total | UF | 62,000,000 | |||||
| R4 | CLP | 100,000,000,000 | 5.5 | 5.50% | 01-09-2015 | 100,000,000,000 | 01-03-2021 |
| P4 | CLP | 50,000,000,000 | 5.0 | 4.80% | 01-03-2015 | 150,000,000,000 | 01-03-2020 |
| SD | CLP | 140,000,000,000 | 5.0 | 5.50% | 01-06-2014 | 200,000,000,000 | 01-06-2019 |
| SC | CLP | 200,000,000,000 | 10.0 | 5.95% | 01-06-2014 | 200,000,000,000 | 01-06-2024 |
| P3 | CLP | 50,000,000,000 | 7.0 | 5.50% | 01-01-2015 | 50,000,000,000 | 01-01-2022 |
| P1 | CLP | 50,000,000,000 | 10.0 | 5.80% | 01-01-2015 | 50,000,000,000 | 01-01-2025 |
| Total | CLP | 590,000,000,000 | |||||
| JPY | JPY | 3,000,000,000 | 5.0 | 0.115% | 22-06-2016 | 3,000,000,000 | 29-06-2021 |
| Total | JPY | 3,000,000,000 | |||||
| DN | USD | 10,000,000 | 5.0 | Libor-USD 3M+1.05% | 02-06-2016 | 10,000,000 | 09-06-2021 |
| DN | USD | 10,000,000 | 5.0 | Libor-USD 3M+1.22% | 08-06-2016 | 10,000,000 | 17-06-2021 |
| DN | USD | 10,000,000 | 5.0 | Libor-USD 3M+1.20% | 01-08-2016 | 10,000,000 | 16-08-2021 |
| DN | USD | 185,000,000 | 5.0 | Libor-USD 3M+1.20% | 10-11-2016 | 185,000,000 | 28-11-2021 |
| Total | USD | 215,000,000 | |||||
| EUR | EUR | 54,000,000 | 12.0 | 1.307% | 05-08-2016 | 54,000,000 | 17-08-2028 |
| EUR | EUR | 20,000,000 | 8.0 | 0.80% | 04-08-2016 | 20,000,000 | 19-08-2024 |
| EUR | EUR | 30,000,000 | 3.0 | 0.25% | 09-12-2016 | 30,000,000 | 20-12-2019 |
| Total | EUR | 104,000,000 | |||||
| CHF | CHF | 125,000,000 | 8.5 | 0.35% | 14-11-2016 | 125,000,000 | 30-05-2025 |
| Total | CHF | 125,000,000 |
During 2016, the Bank performed a partial repurchase of the following bond:
| Date | Type | Currency | Amount |
| 13-01-2016 | Senior | USD | 600,000 |
| 27-01-2016 | Senior | USD | 960,000 |
| 08-03-2016 | Senior | USD | 418,853,000 |
| 08-03-2016 | Senior | USD | 140,104,000 |
| 10-05-2016 | Senior | USD | 10,000,000 |
| 29-11-2016 | Senior | USD | 6,895,000 |
ii. The maturities of senior bonds are as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Due within 1 year | 337,166 | 1,135,713 | |
| Due after 1 year but within 2 years | 866,936 | 321,509 | |
| Due after 2 year but within 3 years | 832,978 | 816,919 | |
| Due after 3 year but within 4 years | 1,177,081 | 663,289 | |
| Due after 4 year but within 5 years | 902,647 | 754,768 | |
| Due after 5 years | 2,069,952 | 2,724,076 | |
| Total senior bonds | 6,186,760 | 6,416,274 | |
| c) | Mortgage bonds |
Detail of mortgage bonds per currency is as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Mortgage bonds in UF | 99,222 | 104,182 | |
| Total mortgage bonds | 99,222 | 104,182 | |
i. Allocation of mortgage bonds
During 2017 and 2016, the Bank has not placed any mortgage bonds.
| ii. | The maturities of Mortgage bonds are as follows: |
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Due within 1 year | 4,541 | 4,318 | |
| Due after 1 year but within 2 years | 7,291 | 6,932 | |
| Due after 2 year but within 3 years | 7,526 | 7,156 | |
| Due after 3 year but within 4 years | 7,769 | 7,386 | |
| Due after 4 year but within 5 years | 8,019 | 7,626 | |
| Due after 5 years | 64,076 | 70,764 | |
| Total Mortgage bonds | 99,222 | 104,182 | |
d) Subordinated bonds
Detail of the subordinated bonds per currency is as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Subordinated bonds denominated in CLP | 3 | 4 | |
| Subordinated bonds denominated in UF | 773,189 | 759,661 | |
| Total subordinated bonds | 773,192 | 759,665 | |
i. Allocation of subordinated bonds
During 2017 and 2016, the Bank has not placed any subordinated bonds.
The maturities of subordinated bonds, are as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Due within 1 year | 3 | 4 | |
| Due after 1 year but within 2 years | - | - | |
| Due after 2 year but within 3 years | - | - | |
| Due after 3 year but within 4 years | - | - | |
| Due after 4 year but within 5 years | - | - | |
| Due after 5 years | 773,189 | 759,661 | |
| Total subordinated bonds | 773,192 | 759,665 | |
e) Other financial liabilities
The composition of other financial obligations, by maturity, is detailed below:
| As of December 31, | |||
| 2017 | 2016 | ||
|
|
MCh$ | MCh$ | |
| Non-current portion: | |||
| Due after 1 year but within 2 years | 23,401 | 33,777 | |
| Due after 2 year but within 3 years | 4,181 | 24,863 | |
| Due after 3 year but within 4 years | 194 | 5,794 | |
| Due after 4 year but within 5 years | 210 | 1,973 | |
| Due after 5 years | 1,219 | 15,121 | |
| Non-current portion subtotal | 29,205 | 81,528 | |
| Current portion: | |||
| Amounts due to credit card operators | 173,271 | 151,620 | |
| Acceptance of letters of credit | 2,780 | 2,069 | |
| Other long-term financial obligations, short-term portion | 36,774 | 4,799 | |
| Current portion subtotal | 212,825 | 158,488 | |
| Total other financial liabilities | 242,030 | 240,016 | |