Moody's lowers Minsur view to stable

Moody's Investors Service said it affirmed Minsur SA's Ba3 corporate family rating and Ba3 rating assigned to its $450 million senior unsecured notes due in 2024.

The outlook also was changed to stable from positive.

The outlook revision reflects the expected weakening in Minsurīs credit metrics, namely leverage, as the company moves forward with its major expansion project Mina Justa, Moody's explained.

The project will require total investments of about $1.6 billion through 2020 and will result in a sharp increase in leverage and sustained negative free cash flows at least until its start-up in late 2020 or early 2021, the agency said.

Minsur has sold 40% of the project to Inversiones Alxar SA, a subsidiary of Chilean company Empresas Copec SA, with which Minsur will share the capital expenditure and risks of the project, Moody's said.

The ratings are supported by Minsur's strong operating performance and track record of execution, good quality of assets, competitive costs basis, strong liquidity position and comfortable debt amortization schedule, the agency said.

The ratings also consider the company's high margins, along with its position as the third largest tin producer worldwide, Moody's said.

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