BASE METALS

Codelco issues US$2B in bonds

Chile’s state copper company Codelco has issued US$2 billion in bonds in New York to refinance some of its short- and medium-term debt, and take advantage of lower interest rates.

Codelco refinances with new bond issue

Codelco refinances with new bond issue

The company, the world's largest copper producer, aims to align its debt profile with the timelines when its structural development projects such as Chuquicamata underground, a new mine level at El Teniente, the Inca mine at Salvador, and the mine-plant transfer system at Andina, will be in full production. "These projects account for three-quarters of the expected output 10 years from now," the company said in a May 2019 presentation.

Codelco issued $1.1 billion in 10-year notes and $900 million in 30-year notes with respective coupons of 3.02% and 3.71%, the lowest it has ever obtained for each term, in an offer that was four-times oversubscribed. Its debt is rated A+/A1/A by credit ratings agencies.

"The conditions of this new placement reflect the confidence of investors in the company and its development projects," said VP administration and finance, Alejandro Rivera in a statement.

Codelco also launched an offer to purchase $639 million of its existing bonds with due dates in 2020, 2021, 2022 and 2023.

This is the third time between 2017 and 2019 that Codelco has issued long-term debt to refinance its short- and medium-term debt as the sector continues to face low copper prices, a situation perpetuating due to the US-China trade war. In August, the company sold bonds for a combined $180 million and sold a minority stake in the GNL Mejillones natural gas port terminal for $193.5 million.

Codelco, which produces about 1.8 million tonnes per year of copper, had net debt of $14.9 billion at the end of the first quarter and has a $20 billion investment plan over the next decade to revamp its mines in Chile, some of which have been producing for more than 100-years old.

In May, the company said its debt maturity profile averaged nine years and at a rate of 4.32%.

 

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.