Vale, the world’s second largest iron-ore producer, tapped international bond markets for the first time in a year amid a debt buyback.
Vale Overseas Ltd, a subsidiary of the Rio de Janeiro-based firm, sold $1 billion of new dollar notes maturing in 30 years at a spread of 210 basis points over similar US Treasuries, according to people familiar with the matter. That’s tighter than initial price talks of about 250 basis points, said the people, who asked not to be identified because they’re not authorized to speak about it.
The company is proposing to repurchase up to $500 million of bonds due in 2034, 2036 and 2039 for cash, according to a statement on Tuesday. The transaction is subject to the completion of an offering of Vale Overseas notes, the company said.
The transaction “helps reduce interest costs and spread out maturities,” also increasing liquidity on the curve, said Peter Varga, a senior portfolio manager at Erste Asset Management GmbH.
Vale last tapped global markets in June of 2023, with a $1.5 billion sale of bonds maturing in 2033. Those notes have handed investors a loss of 1% since the start to the year, compared to a 2.7% gain for emerging-market bonds, according to data compiled by Bloomberg.
Bonds of the Brazilian miner were little changed across the curve on Tuesday, with some maturities edging up. Notes due in 2039 rose as much as 2.9 cents to 109.7 cents on the dollar, according to Trace data.
