S&P cuts Codelco

Standard & Poor's said it lowered its local currency rating on Corporación Nacional del Cobre de Chile (Codelco) to A from A+ and removed it from CreditWatch with negative implications, where it had been placed on July 18.

The agency said that the downgrade reflects the deterioration of the company's stand-alone financial risk profile due to its aggressive and growing debt levels, which in turn derive from the combination of its high capital expenditures and dividend payments.

In addition, S&P said it affirmed its A foreign currency rating on Codelco.

The outlook is stable.

The agency added that the ratings on Codelco reflect the company's strong market position as the world's largest integrated copper mining company, with ample high-grade copper ore reserves, a highly competitive cost structure on a global basis, and direct ownership by and strategic importance to its 100% shareholder, the Republic of Chile (foreign currency A/stable/A-1, local currency AA/stable/A-1+).

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