...Full Sovereign Ownership: The `A+' rating for Corporacion Nacional del Cobre de Chile (Codelco) reflects its 100% ownership by the state of Chile and its strategic importance to the country. Rating linkage to the sovereign was reinforced after a capitalization law was approved that assures capital contributions of USD4 billion through 2019: USD3 billion in fresh resources and USD1 billion in retained earnings. Increasing Pressure on Credit Profile: Codelco has a weakened stand-alone credit profile as a result of lower copper prices and their negative effect on the company's cash flow generation, which meant higher debt levels to finance its large capex program to maintain its production levels. Debt/EBITDA (adjusted for dividends received from associates) was 4.0x in 2016, compared with 4.4x in 2015 and 2.6x in 2014. Elevated Leverage to Remain: Despite the company's stand-alone credit profile deterioration, rating linkage to the sovereign remains solid. Fitch Ratings' base case projects...
