S&P rates Codelco notes A+

S&P said it assigned today its A+ issue-level rating to Corporacion Nacional del Cobre de Chile’s proposed senior unsecured notes. The notes will rank equal to the company’s other unsecured and unsubordinated debt. Codelco will use the proceeds for general corporate purposes including repaying debt.

“Our ratings on Codelco reflect an extremely high likelihood that it would receive financial support from Chile (AA-/Stable/A-1+) if the company were to face risk of bankruptcy. We recently revised our outlook on Codelco to negative from stable and lowered its stand-alone credit profile (SACP) to bb- from bb. The SACP is our opinion of its creditworthiness before considering financial support from the government,” said S&P in a press release.

The negative outlook signals an at least one-in-three chance of a downgrade to A in the next 18 months if the company maintains the current leverage trajectory.

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