Codelco issues bonds for $ 750 million, with a spread greater than 2012 placement
In the market it is estimate that despite the best credit rating, the higher spread that had to be paid is due to expectations of rising Treasuries
In twelve basis points above the previous placement spread closed the international bond issue made yesterday by Codelco in the U.S., this despite the credit rating Standard Agency and Poor’s raised on Monday its rating on foreign currency which went from A to AA-.
As reported by the Company by an essential fact, “today (yesterday) Codelco successfully accessed the international financial markets through a bond issue of U.S. $ 750 million, for a period of ten years, with a coupon of 4.50% and a yield of 4.5175%. “
“These are very competitive conditions according to the reality of international markets, especially for a Latin American issuer and reflect the Codelco’s credit quality,” said the State C ompany.
However, the coupon is higher than the rate at which the bond placed aired last year, which was, for the same period, with a coupon of 3%.
In a statement, the Codelco’s Vice President of Administration and Finance, Ivan Arriagada, said that “despite the financial market conditions are tighter compared to last year, the total cost of the new debt is competitive and is within the range planned. This reflects the excellent performance of this placement and is a Codelco’s endorsement development plan “.
Market supports the operation
In 2012, when the State Company issued bonds worth U.S. $ 2,000 million in a series to ten years and another to 30 years, the spread paid was 165 basis points, while the transaction made yesterday paid 187 basis points.
Although the spread in this operation was higher, the market is more positive vision. So believes, for example, the expert Diego Torres from Munita, Cruzat and Claro (MCC). “We believe that deep down the spread, it is marginally greater, is not collecting the increased risk of Codelco, but expectations of a potential rise in Treasury rates (the U.S.), and investors are being protected rather hike the benchmark, not from a deterioration in the credit quality of the issuer “.
Allocation of resources collected
The essential fact submitted to the Superintendency of Securities and Insurance (SVS), the mining Company explained that the funds raised “will be used to finance part of Codelco’s investment plan in 2013”.
The Company is conducting a long-term investments Plan of about U.S. $ 27,000 million to offset the natural decline in ore grade deposits.
This is the issue number thirteen that makes Codelco and was led on this occasion by the HSBC Holdings, Bank of America Merrill Lynch and Mitsubishi Securities banks.
The international issue attracted investors orders in America, Europe, Asia and Middle East.
Source: Diario Financiero
