S&P affirms Phelps Dodge

Standard & Poor's said it affirmed all its ratings on Phelps Dodge Corp., including the BBB corporate credit rating and removed them from CreditWatch following the announcement that Phelps and Inco Ltd. (BBB-/Watch positive) have canceled their combination agreement.

The outlook is stable.

The agency said that the ratings were originally placed on CreditWatch with negative implications on July 18.

S&P noted that the ratings on Phelps Dodge reflect its leading international position in copper mining, strong liquidity position and credit metrics, favorable copper fundamentals and conservative balance sheet, adding that the ratings also reflect the company's exposure to volatile commodity prices and cyclical end markets, rising costs and the challenges it faces at its mature U.S.-based operations.

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