Brazil’s Vale announces pricing, early results of tenders, lifts cap

By Sarah Lizee

Olympia, Wash., Sept. 26 – Vale SA announced on Thursday pricing and the early results of the tender offers for six series of notes that it launched with subsidiaries Vale Canada Ltd. and Vale Overseas Ltd.

In addition, the company said that the maximum amount of tenders that it would accept has been lifted to $1,081,393,000 from $1 billion.

As of the early tender date of 5 p.m. ET on Sept. 25, the following amounts had been tendered, listed in order of acceptance priority level, with the total considerations listed per $1,000 principal amount:

• $263,583,000 of the $1,594,805,000 of 6 7/8% guaranteed notes due 2039 issued by Vale Overseas, with pricing set using the 2 7/8% Treasury due May 15, 2049 plus 253 basis points, for a total consideration of $1,285.19;

• $103,326,000 of the $400 million of 7.2% debentures due 2032 issued by Vale Canada, with pricing set using the 1 5/8% Treasury due Aug. 15, 2029 plus 329 bps, for a total consideration of $1,209.66;

• $193,328,000 of the $1,809,315,000 of 6 7/8% guaranteed notes due 2036 issued by Vale Overseas, with pricing set using the 2 7/8% Treasury due May 15, 2049 plus 240 bps, for a total consideration of $1,276.41;

• $294,294,000 of the $2 billion of 6¼% guaranteed notes due 2026 issued by Vale Overseas, with pricing set using the 1 5/8% Treasury due Aug. 15, 2029 plus 191 bps, for a total consideration of $1,159.52;

• $66,178,000 of the $544,644,000 of 8½% guaranteed notes due 2034 issued by Vale Overseas, with pricing set using the 1 5/8% Treasury due Aug. 15, 2029 plus 299 bps, for a total consideration of $1,368.48; and

• $160,684,000 of the $1,069,049,000 of 4 3/8% guaranteed notes due 2022 issued by Vale Overseas, with pricing set using the 1½% Treasury due Aug. 15, 2022 plus 99 bps, for a total consideration of $1,039.11.

Because the amount tendered by the early deadline exceeded the cap, the issuer does not expect to accept any more notes for purchase.

Holders will also receive accrued interest.

No more than $700 million of the notes due 2039, 2032 and 2036 may be accepted for purchase. There is no sub-cap for the other three series.

The offer will expire at 11:59 p.m. ET on Oct. 19.

Holders who tendered their notes by the early deadline will be eligible to receive the total consideration, which includes the early tender premium of $50 per $1,000 of notes.

Tenders may be withdrawn before the early deadline.

Pricing was set at 2 p.m. ET on Sept. 26.

Early settlement is expected for Sept. 30.

Dealer managers include Banco Bradesco BBI SA (646 432-6643 collect), Itau BBA USA Securities, Inc. (212 710-6749 collect), J.P. Morgan Securities LLC (212 834-3424 collect or 866 834-4666 toll free), Santander Investment Securities Inc. (212 940-1442 collect or 855 404-3636 toll free) and Scotia Capital (USA) Inc. (212 225-5559 collect or 800 372-3930 toll free).

D.F. King & Co., Inc. (212 269-5550, 866 406-2283 toll free or vale@dfking.com) is the tender and information agent.

Vale is a Rio de Janeiro-based metals and mining company.

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