CVRD talks $1.9 billion three-year mandatory exchangeables at 5.25%-5.75%, up 22%-28%

By Kenneth Lim

Boston, June 18 - Companhia Vale do Rio Doce (CVRD) plans to price about $1.9 billion of three-year mandatory exchangeable notes on Tuesday after the market closes, talked at a coupon of 5.25% to 5.75% and an initial exchange premium of 22% to 28%, market sources said.

The exchangeables will be issued by CVRD finance subsidiary Vale Capital Ltd. and will be exchangeable into CVRD's common stock or American Depositary Receipts.

There is no over-allotment option.

JPMorgan and Citigroup are the bookrunners of the registered offering.

The exchangeables will be non-callable and may not be put.

There will be takeover protection.

CVRD, a Rio de Janeiro-based diversified metals and minerals mining company, said the proceeds of the deal will be used for general corporate purposes.

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