THE CODELCO CASE

THE CODELCO CASE

The Chilean copper producer, Codelco, placed bonds in the international market in great conditions for the company, which announced this placement as unprecedented.

The company through this placement will be refinancing debt and financing part of the 2013 expansion plan that the company is trying to achieve. This also will be done with part of the capitalization of the profits of the 2011, which was approved by the larger stockholder of the company last month.

Codelco managed to place 2.000 million dollars in the international market with an oversubscription of 500% that counted with 300 investors all over the world, mostly from Latin America, Asia and Middle East.

The conditions for the issuance of these bonds are that the maturity of these bonds will be 10 and 30 years tops. In the first case, the 10 year yield will be between 3% and 3.157% annually (the company issued 1.250 million dollars of this bond), and in the second case the 30 years yield will be between 4.25% and 4.398% annually (of this bonds were issued 750 million dollars).

Fitch Ratings gave A+ qualification to the bonds issued by the Chilean company due to its solid financial management and the largest copper reserves of the company which are the 9% of the worldwide known copper reserves.