CORRECT:Chile Pension Fund Regulator Limits Investments In Spanish Shares

Following Spain's recent sovereign downgrade, Chile's pension fund risk-classification committee, or CCR, will reduce by half the investments private pension fund managers can have in Spanish-listed shares for investment.

Private pension fund managers, known locally as AFPs, are Chile's biggest institutional investors and held a consolidated $132.66 billion at the end of September.

The CCR will also limit investments in the Barcelona, Bilbao, Madrid and Valencia stock exchanges by Chile's private pension fund managers.

"With the CCR's disapproval of investments in Spanish-listed shares, AFPs can invest in those shares by only half as much," said a spokesman for the committee.

In October, Standard & Poor's Ratings Services downgraded Spain a notch, to double-A-minus, three steps below the top triple-A rating. Its outlook is negative.

The move followed Fitch Ratings, which downgraded Spain two notches to double-A-minus, citing an intensifying euro-zone crisis and weak economic growth.

AFP Provida SA (PVD, PROVIDA.SN), 51.6% owned by Spanish bank Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC), managed the largest portfolio among local pension-fund managers at the end of September.

AFP Habitat (HABITAT.SN) is Chile's second-biggest AFP, followed by AFP Capital. Capital was created in 2008 after Dutch banking group ING Groep NV (ING, INGA.AE) bought Banco Santander SA's (STD, SAN.MC) AFP Bansander and merged it with its AFP Santa Maria.

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; anthony.esposito@dowjones.com

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