Initial mandated lead arranger and sole bookrunner BBVA has closed syndication on a US$400mn seven-year facility for the state-owned Chilean copper producer Codelco. General syndication opened from August 28 and closed on September 12. The facility was underwritten 100% by BBVA.
A further three banks joined the facility before general syndication, with the Canadian banks showing particular interest in the deal. Both Export Development Canada and Royal Bank of Canada joined the facility alongside Bank of Tokyo-Mitsubishi UFJ.
During syndication ten other banks participated in the deal. The funds are being used for general capex purposes.
The facility is unstructured, as is typical with Codelco’s financings. The pricing is predictably low with the facility paying 12.5 basis points for the first year, rising to just 20bp in the final two years.
In a statement issued to GTR about the low pricing, BBVA comments: “It was tight, but the strong credit quality of the borrower helped to get an oversubscribed deal. Codelco is amongst the best rated companies in Latin America therefore it benefits from lower prices than most if not all other corporate issuers in the region.”
As of October 2006, Moody’s has accredited Codelco with an Aa3 rating foreign-currency rating (outlook stable).