Fitch assigns A+ rating to Codelco's US$1.15bn bond issue

The Chilean branch of ratings agency Fitch has assigned an A+ rating to state copper producer Codelco's US$1.15bn issue of senior unsecured 10-year bonds. The rating reflects the fact that the company is 100% owned by the Chilean state and its strategic relevance for the country as a significant contributor to the treasury, Fitch said in a report. In 2010, Codelco's net income amounted to US$16.1bn, representing 8% of Chile's GDP and 32% of the country's fiscal income. The company also holds a solid standalone credit investment grade and is a low-cost producer, Fitch said. The bonds have a 3.875% annual coupon and a 4.048% annual interest rate, and the issue was more than three times oversubscribed by over 150 investors from the Americas, Europe, Asia and the Middle East. Proceeds will be used to pay debt and partly finance Codelco's 2012 investment plan. This is the ninth bond issue carried out by Codelco. In October last year it issued US$1bn in 10-year bonds at a 3.96% interest rate to partly finance this year's investment plan and roll over short-term debt into longer-term bonds. To read the full report, in Spanish, go to this link