PRESS RELEASE

Codelco issues bonus to optimize its financial structure

By
Monday, January 28, 2019

Codelco press release

Taking advantage of the favorable conditions that the debt market currently presents, Codelco announced in New York an operation that will give it greater financial slack to invest in its structural projects, the first of which, Chuquicamata Subterránea, will begin operations this year.

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The issuance will allow the state company to alleviate its debt repayment profile for the period 2020-2025 and extend part of its financial commitments to 30 years, matching the payment date with the years in which, in addition to Chuqui Subte, they will also be in full production New Mine Level, Andean Transfer and Inca Rajo. In this way, Codelco launched in New York an offer to buy its bonds issued in dollars with maturities between 2020 and 2025, whose final results will be known in the coming weeks.

With this operation, the net debt of the copper company is not increased and a new step is taken in a sustainable financing of the investment portfolio, according to the guidelines given by the board in terms of advancing the realization of structural projects and maintaining a solid financial position.

Successful operation

To finance this exercise Codelco made a successful placement of US $ 1,300 million bonds in 2049 this morning, with an attractive return of 4.815%, a spread of 175 basis points over the US Treasury bond, orders from more than 275 investors, and an oversubscription of four times. This spread over the American treasury, together with that obtained in 2017, is the lowest that the Corporation for 30-year debt has obtained in its history.

The transaction was led by the Banks HSBC Securities (USA) Inc, JP Morgan Securities LLC, Citigroup Global Markets Inc., and Scotiabank.

"This operation, very similar to the one we executed in 2017, shows responsible financial management and reflects the confidence of the investors in the Corporation and its development projects," said the Vice President of Administration and Finance, Alejandro Rivera.

Communications and Public Affairs Management

This press release was published in English using an automated translation system