More for Less: Following Heavy Demand, Vale Captures US$1.5 Billion Abroad

RIO DE JANEIRO, BRAZIL – Vale went to the foreign market to seek US$1 billion (R$5 billion) in 10-year-yield bonds and an initial rate estimate of 4.375 percent per annum. Early in the afternoon, the operation recorded four-fold demand and further increased.

As a result, the giant mining company – with revenues tied to the dollar – raised US$1.5 billion at a cost of 3.85 percent per year, an indication that investors abroad are willing to buy debt from Brazilian companies at the current rates. At today’s exchange rate, this amounts to R$8 billion.

In the post-Covid-19 world, it was the third important foreign bond issue. Last week, Rumo raised US$500 million in “green bonds”, with a demand five times greater than supply. In late May, Petrobras had re-issued international bonds when it raised US$3.25 billion.

The coordinators of Vale’s issue were BB Securities, Citigroup, Credit Agricole, Mizuho, MUFG, and SMBC Nikko. To raise high amounts, the international market continues to offer more “depth”, as experts say, although the domestic market has also shown signs of improvement.

Despite the absence of pressure from short-term maturities, Vale has sought flexibility to face the pandemic scenario. According to the company’s documents, the company closed March with almost US$12 billion in cash and equivalents and its operational resource generation totaled US$1.68 billion in the first quarter.

Source: Exame

Related coverage: Brazilian Private Sector Wants Brazil-USA Agreement Before US Elections · Projected Trajectories Agree That Brazil's Public Debt Will Soon Exceed Its GDP · Magazine Luiza Focuses on Advancing Its Digital Payment Sector · Solar Energy Triples Capacity in Brazil in One Year

More: Brazil news in English, every day from The Rio Times.

This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error

Brazil runoff, Sunday, October 25: When is the Brazil runoff election. Latest: Brazil runoff polls, Flávio 51%, Lula 49%.