S&P cuts Codelco

S&P said it lowered its ratings on Corporacion Nacional del Cobre de Chile (Codelco) and its senior unsecured notes to BBB+ from A-.

The agency said it sees Codelco’s leverage rising in 2024 and 2025, which led it to lower its stand-alone credit profile to b+ from bb-.

“Our estimates incorporate new issuances in 2024 of at least $1.5 billion, a slight increase in volumes in 2024, and a more substantial growth in volumes in 2025 while prices remain moderate at around $8,500-$8,700 per ton. We include the debt for the new desalination plant in our base case because Codelco will backstop debt payment to the project finance sponsor. We estimate the plant's debt will peak at $1.5 billion by year-end 2025,” S&P said in a press release.

The outlook is stable.

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