Vale issues $1B in bonds

BRAZILIAN mining giant Vale has issued $US1 billion ($A960 million) in bonds maturing in 2022 and will use the proceeds for general corporate purposes.
Vale issues $1B in bonds Vale issues $1B in bonds Vale issues $1B in bonds Vale issues $1B in bonds Vale issues $1B in bonds

 

Kristie Batten

The bonds have a coupon rate of 4.375% per annum, payable semi-annually at a price of 98.804% of face value of the title.

The bonds mature in January 2022 and were issued with a spread of 255 basis points over US Treasury bonds, resulting in an income to the investor of 4.525%.

The bonds have been issued through a wholly owned subsidiary, Vale Overseas, and are guaranteed by Vale.

Citigroup Global Markets, HSBC Securities, JP Morgan Securities, BB Securities and Banco Bradesco BBI were the joint lead managers and joint bookrunners.

The bonds are rated A– by Standard & Poor's Rating Services, Baa2 by Moody's Investor Services, BBB (high) by Dominion Bond Rating Service and BBB+ by Fitch Ratings.

Vale will use the net proceeds of the offering for general corporate purposes.

The company’s board has approved a substantial investment budget for 2012.

Vale has allocated $12.9 billion for project execution, $2.4 billion for research and development and $6.1 billion for sustaining existing operations.

“Based on a long-term view of global minerals and metals markets, the capex budget is aligned with our vision of becoming the best global natural resources company in long-term value creation, with excellence and passion for people and the planet,” the company said.

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