Codelco taps debt market to fund record copper mine investments

Chile’s state copper company Codelco sold $1.5 billion in bonds to help fund record investments needed to retain its status as the world’s biggest producer of the wiring metal.

In a transaction led by Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Banco Santander SA, Codelco placed notes maturing in 10 and 30 years at spreads over U.S. Treasuries of 165 and 185 basis points, respectively. It sold a similar amount a year ago.

Codelco has embarked on an unprecedented spending program to overhaul its aging copper operations after decades of underinvestment. Capital expenditure was budgeted at between $4 billion and $5 billion last year and almost $6 billion this year as the company looks to recover from the lowest production levels in a quarter century.

Demand for the bonds exceeded $8.3 billion in a strong endorsement of the company’s strategy, Codelco said in a statement late Wednesday.

(By James Attwood)