The company, the world's largest copper producer, aims to align its debt profile with the timelines when its structural development projects such as Chuquicamata underground, a new mine level at El Teniente, the Inca mine at Salvador, and the mine-plant transfer system at Andina, will be in full production. "These projects account for three-quarters of the expected output 10 years from now," the company said in a May 2019 presentation.
Codelco issued $1.1 billion in 10-year notes and $900 million in 30-year notes with respective coupons of 3.02% and 3.71%, the lowest it has ever obtained for each term, in an offer that was four-times oversubscribed. Its debt is rated A+/A1/A by credit ratings agencies.
"The conditions of this new placement reflect the confidence of investors in the company and its development projects," said VP administration and finance, Alejandro Rivera in a statement.
Codelco also launched an offer to purchase $639 million of its existing bonds with due dates in 2020, 2021, 2022 and 2023.
This is the third time between 2017 and 2019 that Codelco has issued long-term debt to refinance its short- and medium-term debt as the sector continues to face low copper prices, a situation perpetuating due to the US-China trade war. In August, the company sold bonds for a combined $180 million and sold a minority stake in the GNL Mejillones natural gas port terminal for $193.5 million.
Codelco, which produces about 1.8 million tonnes per year of copper, had net debt of $14.9 billion at the end of the first quarter and has a $20 billion investment plan over the next decade to revamp its mines in Chile, some of which have been producing for more than 100-years old.
In May, the company said its debt maturity profile averaged nine years and at a rate of 4.32%.