S&P ups Freeport-McMoRan from junk

Standard & Poor's said it raised the corporate credit rating on Freeport-McMoRan Copper & Gold Inc. and its Phelps Dodge Corp. subsidiary to BBB- from BB+.

The agency lowered the ratings on the company's senior secured debt to BBB- from BBB and raised the rating on the unsecured debt of both Freeport and Phelps to BBB-.

The upgrade reflects the company's substantial debt reduction since the Phelps Dodge acquisition closed about 12 months ago, S&P noted.

Ratings reflect a leading position in copper mining, significant and diverse reserve base, very low-cost Indonesian operations, reduced debt levels, good liquidity and currently favorable metals prices, the agency said.

Ratings also reflect exposure to cyclical and volatile commodity prices, rising costs, challenges faced at its mature U.S.-based operations and exposure to political and sovereign risks in Indonesia, according to S&P.

The issuer's adjusted debt-to-EBITDA ratio is about 1 times.

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