Chilean miner launches bond offering

Codelco is selling 10-year bonds, its debut issue in euros, as the world’s biggest copper miner seeks to raise funding to revamp aging mines.

The Chilean state-owned company expects to raise 600 million euros ($819 million) today, according to a person familiar with the sale, who asked not to be identified because they were not authorized to speak publicly about it. The bonds are expected to price at 93 basis points over midswaps, the person said.

Codelco will be allowed to retain $200 million of last year’s profit as the first part of Chilean government funding for investments to revamp copper mines, the Finance Ministry said in an e-mailed statement July 1. The funds fall short of the $1.2 billion in capital urgently needed for this year, according to the Federation of Copper Workers.

The capital injection is a stopgap measure as President Michelle Bachelet prepares a bill she says will ensure the company’s long-term financing. Codelco is seeking funds for $25 billion of investments to maintain its global status. Without the spending, output would slump.

Deutsche Bank AG, HSBC Holdings Plc and Banco Santander SA are organizing the bond sale.

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