The world’s number one copper producer Codelco announced it had placed 2 billion dollars in bonds, its largest debt issue to date, aimed at refinancing debt and funding a good part of the miner's 2013 investments.
State miner Codelco placed a 10-year 1.25 billion bond at a 3.157% yield and a 30-year 750 million bond at a 4.398%.
Codelco has an ambitious plan to invest 27 billion from 2012 to 2016 to increase annual copper production to over 2 million tonnes from its current level of around 1.7 million tonnes.
The issue was oversubscribed over five times and attracted orders of over 300 investors in the Americas, Europe, Asia and the Middle East, CEO Thomas Keller said in a statement to the local regulator.
Codelco said the yields it achieved are among the cheapest funding it has ever had.
“They are a recognition of the credit quality of Chile and of Codelco in an environment characterized by volatility in international financial markets,” the company said in a regulatory filing.
Codelco will use the proceeds to refinance debt as well as to fund its investment program for 2013, it said. The company has 435 million dollars of bonds falling due this year and another 500 million next year and is building an underground mine at its century-old Chuquicamata open pit in the Atacama desert. The government allowed Codelco to retain 800 million, or 40% of last year’s profit.
The bonds will be rated A1, the fifth-highest investment grade rating, Moody’s Investors Service said in a statement. Codelco’s ownership by Chile, the highest-rated Latin American country, is a major factor in its rating, Moody’s said. Credit- default swaps of Chile trade just 15 basis points wider than Germany’s.