Codelco Expected to Mandate Loan

Blue chip Chilean copper producer Codelco is reviewing pitches for a $400m syndicated loan and bankers expect it to announce early next week the winner and structure. Tenors of 4-7 years are heard and bankers are eager to see the margin. As copper prices grind higher and following an easy recent syndication for Pemex at wafer thin margins, lenders are likely to have to bite the bullet for a relationship with the region’s top miner. Pemex paid just 20bp over Libor on a $1.25bn 3-year and 25bp on a 5-year the same size. “How low can you go?” wondered one banker. “Libor plus lunch,” guessed another. Either way, the deal will be a key measure of how volatility elsewhere in the global financial markets will impact Latin loans. For many years it has been a case of too much cash chasing too view assets and for now, at least, this dynamic continues. “You have a meltdown in the North American market and our market is “no problem”,” says a syndications expert at a major US lender.