Fitch downgrades Codelco

Fitch Ratings said it downgraded Corporacion Nacional del Cobre de Chile's (Codelco) long-term foreign-currency issuer default rating and senior unsecured rating to A- from A and long-term-local currency issuer default rating to A from A+.

The ratings were removed from rating watch negative.

The outlook is stable.

Fitch said the downgrade follows the publication of its new "Government-Related Entities Rating Criteria," which the agency applied in its assessment of Codelco's ratings.

Fitch placed the ratings on rating watch negative on Nov. 29 after the release of the exposure draft of the GRE criteria.

“The ratings are now one notch below the sovereign ratings of Chile (A/A+/Stable) and the notching reflects our assessment of the status, ownership and control links between Codelco and the state, as well as the support track record and expectations as very strong,” the agency said in a news release.

“We also deem the financial implication of GRE's potential default as strong, while we view the socio-political implications as moderate.

“We assess Codelco's standalone credit profile at BBB-.”

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