S&P ups Americas Mining, units

Standard & Poor's said it raised its corporate credit rating on Americas Mining Corp. and the company's three mining subsidiaries, Minera Mexico SA de CV, Asarco Inc., and Southern Peru Copper Corp., to B- from CCC+.

The outlook is positive.

"The upgrade on AMC and its subsidiaries reflects the company's improved cash flow and ability to significantly reduce leverage," said S&P credit analyst Juan P. Becerra. "This in turn was due to higher-than-expected metals prices and the dedication of excess cash flow to repay debt (as required by Minera Mexico debt covenants)."

S&P said the rating on Americas Mining and its subsidiaries reflects the company's still-aggressive debt profile, volatile metal prices, average cost position, and lack of product and geographic diversification. In addition, Americas Mining has very limited liquidity at the holding company level and a high dependence on volatile dividends from Southern Peru Copper, given the current effective cash trap at the Minera Mexico level and negative cash flow at Asarco.

These factors are balanced by Americas Mining's position as the third-largest copper producer in the world, including particularly low-cost mines at Southern Peru Copper, its vertical integration, and its realized and expected debt reduction.

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