Chile has a new institutional investor poised to plow billions of dollars into corporate bonds over the next few years, just as local pension funds are raking in more money than ever, promising a boon for domestic borrowers.

The public investment fund for pension support, known as FAPP, will raise around $4 billion in the next five years and $14 billion by 2036, according to its executive director Sergio Soto.

About two thirds of that money will flow into the local corporate debt market, he added.

This surge in capital is expected to strengthen Chile’s domestic borrowing environment, offering more opportunities for companies seeking financing in a favorable market.

Bloomberg Markets highlighted the timing of this influx as a strategic advantage for borrowers, noting that the combined momentum from FAPP and pension funds could elevate Chile’s bond market to new heights.

Investors and analysts will monitor the allocation decisions closely, as the influx of capital could shift credit spreads and influence the demand for corporate debt instruments across the region.

The Chilean government has expressed support for the initiative, emphasizing its role in fostering a robust financial ecosystem and encouraging foreign investment.