Fitch rates Codelco notes A-

Fitch Ratings said it assigned an A- rating to Corporacion Nacional del Cobre de Chile's (Codelco) $1.3 billion 4 3/8% senior unsecured notes due 2049.

The proceeds from the proposed notes will be used to primarily refinance upcoming bond maturities, Fitch said.

Codelco initiated a tender offer for up to $1.9 billion to purchase the outstanding notes due in 2020, 2021, 2022, 2023 and 2025.

The overall transaction will allow Codelco to improve its debt maturity profile and strengthen its liquidity, the agency said.

New bond issuances are not expected to increase the company's net leverage ratio, Fitch said.

The A- rating is one notch lower than Chile's sovereign rating based on the agency's government-related entities rating criteria, the agency said.

Codelco is fully owned by the sovereign and is its single largest contributor, Fitch said.

The agency said it believes Codelco's credit metrics will strengthen through 2021 based on mid-cycle commodity price assumptions of about $3.00 per pound for copper over the next two years, increasing to $3.20 per pound in 2021.

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