Moody's rates Codelco notes Aa3

Moody's Investors Service said it assigned an Aa3 rating to Corporacion Nacional del Cobre de Chile's (Codelco) $500 million senior unsecured note issue. Moody's also affirmed its existing Aa3 senior unsecured ratings.

The outlook is stable.

Moody's said the rating reflects the company's position as the largest global copper producer and a significant molybdenum producer. Its multiple mine operating profile, long-lived reserve bases and competitive cost position are further factors supporting the rating.

In addition, the ratings reflect the application of Moody's rating methodology for government-related issuers, which results in a baseline credit assessment of 2, reflective of its industry position, cash generating capacity and vertical integration, in combination with the rating factors mentioned above. At the same time the baseline credit assessment considers the company's vulnerability to copper price volatility, aggressive capital spending program to 2006 and beyond and increasing use of debt to fund its strategic investments.

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