Moody's rates Southern Peru Copper notes Ba1

Moody's Investors Service said it assigned a Ba1 corporate family rating to Southern Peru Copper Corp. (SPCC) and a Ba1 rating to the company's $600 million issuance of senior unsecured notes.

In a related rating action, Moody's said it assigned a SGL-1 speculative-grade liquidity rating and proceeds from the $600 million note offering will be used to repay existing debt, which could include debt at Minera Mexico SA de CV.

At the same time, Moody's said it placed the ratings of Minera Mexico (B1 issuer rating) under review for possible upgrade.

The Ba1 corporate family rating for SPCC reflects the relatively high level of capital investment requirements, both for strategic growth and required environmental upgrades, and in the case of Minera Mexico, the limited investments made in 2002 and 2003 due to its financial difficulties, the short operating history of the newly combined operations of SPCC and Minera Mexico and the potential for an aggressive dividend policy, the agency noted.

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