S&P affirms Freeport-McMoRan credit rating

Standard & Poor's Ratings Services said Thursday that it has assigned its 'B-' rating to Freeport-McMoRan Copper & Gold Inc.'s $500 million of senior convertible notes due 2011.

Standard & Poor's said that it also affirmed its ratings, including its 'B' corporate credit rating, on the New Orleans-based company.

Proceeds from the offering will be used to repay all outstanding borrowings under the company's bank facilities, which it intends to replace with a new bank credit facility.

"The ratings on Freeport McMoRan are limited by the risks of operating in Indonesia and its aggressive debt leverage," said Standard & Poor's credit analyst Dominick D'Ascoli. "Still, Freeport benefits from its low production costs and its improved liquidity due to its recent refinancing activities."

Freeport-McMoRan, which mines for copper and gold in Papua province, is one of the largest copper and gold producers in the world, with copper and gold production of 1.5 billion pounds and 2.3 million ounces, respectively in 2002. (alex)