Chile Copper Mine Conducts New Loan

Chilean blue chip miner Antofagasta is looking to raise an up to $750m loan for its Los Pelambres open pit copper mine. In its RFP to banks, it requested bids for tenors of 3, 5, 7 and 10 years, say market participants, who note invitations went to ECAs and commercial banks. The company is understood to be already evaluating proposals, and may select leads in the coming weeks. Bankers say Antofagasta faces a cost of around Libor plus 200bp for 3-year bullet risk. The deal will be structured as a corporate loan rather than as project finance, given the brownfield nature of the venture, which has an long operating track record and predictable Ebitda. The borrower will also seek to avoid a broad syndication, sticking instead to a club of willing lenders, speculate market participants. In May, Antofagasta wrapped up a $1.05bn 12-year project financing for Minera Esperanza, a copper and gold project it co-owns with Marubeni. Of the total pile, $650m was taken by ECAs and the remaining $400m distributed among commercial banks Tokyo-Mitsubishi, Calyon, ING, Mizuho, Santander, SMBC and Natixis. While this deal means some banks already have exposure to Chilean mining risk and Antofagasta, it should not detract from interest in deploying more capital to the credit, given its high quality.