The deal
Chilean state-owned copper giant Codelco raised $2bn (1.79trn pesos) in a bond offering in New York last week. Banks BNP Paribas, Citi, JP Morgan, Santander and Scotiabank are the joint bookrunners on the offer.
The details
The company offered both ten-year and 30-year notes, legal documents that serve as an IOU from a borrower to a creditor. The ten-year note, which will run to 2034, was for $1.3bn with a yield of 5.966%. The 30-year note was for $700m with a yield of 6.331%.
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Why it matters
The company, one of the biggest copper producers in the world, hopes to use the funds to boost dwindling copper output, which is at its lowest level in 25 years, according to Reuters. Codelco has also faced calls recently to reduce its debts to more manageable levels after production costs spiralled.
“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 $4.1bn,” a spokesperson for the company 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 by 2030,” they added.
Last month, it was reported that Codelco was in talks with Anglo American to expand copper output in Chile. Discussions centred on potentially tapping into mineral-rich lands between Codelco’s Andina mine and Anglo American’s Los Bronces mine.
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By GlobalDataIn the same month, Codelco sought environmental approval to extend the life of its Ministro Hales mine until 2030, a move that would require $2.5bn in investment.
Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets – patents, jobs, deals, company filings, social media mentions and news – to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.
