Home Commodities Commodities : Copper giant Codelco offers bonds to fund larger $4.1 bln...

Commodities : Copper giant Codelco offers bonds to fund larger $4.1 bln spend


SANTIAGO, Sept 5 (Reuters) – Chile’s Codelco launched a
bond offering in New York on Tuesday to help fund the
above-average investment of $4.1 billion the world’s largest
copper producer said it needs to make this year to push forward

The state-run miner is not only battling to reignite copper
production which is at its lowest level in 25 years, but is also
facing calls to rein in its debt, which has ballooned as costs
have overrun at some of its key mines in the Andean country.

The company is offering 10-year and 30-year notes. The
10-year bond is expected to have a yield of 210 basis points
over the U.S. Treasury rate, with the 30-year bond offering a
return of 235 basis points over the benchmark, LSEG’s IFR

“This financing seeks to ensure the availability of
resources for the development of a demanding portfolio of
investments that for this year will need a total of $4.1
billion,” Codelco said in a statement.

“This magnitude of capital is consistent with the higher
level of activity of the structural projects, which are resuming
their construction pace and which will help increase the firm’s
production level to 1.7 million (metric) tons in 2030.”

Late last month, rating agency Moody’s said it was reviewing
a possible ratings downgrade for Codelco amid weakened
production, rising costs and growing financial pressure. It said
the firm would need to lift its investments to about $4 billion
from $3.3 billion to boost its “structural projects.”

Banks BNP Paribas, Citi, J.P. Morgan, Santander and
Scotiabank are the joint bookrunners on the offer, IFR said. The
tender results will come out later on Tuesday.

Codelco’s production slipped last year to about 1.45 million
metric tons, the lowest in around a quarter of a century, and
output has slipped further this year with the miner expecting to
produce 1.31 million to 1.35 million metric tons of copper.
(Reporting by Fabian Cambero; Writing by Kylie Madry; Editing
by Steven Grattan and Emelia Sithole-Matarise)

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