S&P rates VM Holding notes BB+

S&P said it assigned a BB+ debt rating to VM Holding SA's proposed senior unsecured notes.

VM Holding's operating subsidiaries, Votorantim Metais – Cajamarquilla SA, Compania Minera Milpo SAA and Votorantim Metais Zinco SA, will unconditionally guarantee the notes.

The proceeds from this issuance will be used to repay outstanding bank loans and lengthen the company's debt-maturity profile, S&P said.

The company's BB+ corporate credit rating reflects its solid position as an integrated zinc producer in Brazil and Peru, the agency said, and its sustainable business model.

The ratings also consider its well-defined growth strategy, long life of mines and adequate cash cost, S&P said.

The ratings also take into account the company's reliance on the Cerro Lindo mine, which is responsible for 40% to 45% of overall output and cash generation, the agency said.

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