Jan. 21 (Bloomberg) -- Chile plans to sell four-year bonds abroad, seeking to tap lower borrowing costs and help fund spending, people familiar with the sale said.

The dollar-denominated, floating-rate bonds would be the South American country's first international debt sale in a year as forecasts of the fastest economic growth since 1997 stoke investor confidence. The sale will be managed by Citigroup Inc. and J.P. Morgan Chase & Co. and is expected tomorrow, said investors including John Orrock, head of trading at BlueBay Asset Management in London. The amount for the sale hasn't been announced, he said.

``The prospects for growth in 2004 look good,'' said Michael Gomez, who helps manage about $14 billion of emerging market debt including Chilean bonds for Pacific Asset Management in Newport Beach, California, in a telephone interview earlier this month.

Chile, whose A debt rating from Standard & Poor's is Latin America's highest, joins Mexico in taking advantage of falling borrowing costs as strengthening global economic growth reduces the risk of buying securities in emerging markets. Mexico plans to sell 20-year bonds tomorrow in its first sale of U.K. pound debt in more than two decades.

On Jan. 8, the Chilean government said it will sell as much as $700 million of bonds abroad and a similar amount in the domestic market this year to help fund an expected national budget deficit.

``This is going to be another deficit year, so they need to take on more debt abroad and locally,'' Aldo Lema, chief economist at Banco Security, said in a telephone interview from Santiago.

The government also said it will use proceeds from bond sales to make debt payments, using authorization from congress to sell as much as $1.5 billion of debt this year.

Finance Minister Nicolas Eyzaguirre declined requests for comment, according to a spokeswoman, who said he plans to talk to reporters later today about the country's financing plans.

J.P. Morgan spokeswoman Brooke Harlow declined comment. Danielle Romero-Apsilos, a spokeswoman for Citigroup, said she couldn't immediately comment.

Last Updated: January 21, 2004 11:11 EST