Brazil's Vale Raises $1.25 Billion from Overseas Bond Issue
08 June 2016 - 9:40PM
Dow Jones News
SÃ O PAULO—Brazilian mining giant Vale SA raised a total of
$1.25 billion from an overseas bonds issue, reinforcing the return
of local companies to the international debt market arena.
Vale issued bonds due in June 2021 and it will pay an annual
yield of 5.875% to investors, the company said in a statement.
"Vale will use the net proceeds of this offering for general
corporate purposes, including repayment of indebtedness," the
company said.
Banco Bradesco BBI; BB Securities Ltd.; HSBC Securities; Merrill
Lynch; Pierce, Fenner & Smith Inc.; and Santander Investment
Securities Inc. coordinated the operation.
The issue attracted a demand worth $4 billion from investors,
according to a banker close to the transaction.
Vale's issue took place a few weeks after state-run oil company
Petró leo Brasileiro SA, or Petrobras, and meatpacker Marfrig
Global Foods SA tap the international debt market, with bond issues
worth $6.75 billion and $750 million respectively.
Meanwhile, local pulp company Eldorado Brasil Celulose SA and
sugar and ethanol producer Cosan SA are planning to issue bonds in
the next few days, according to the banker.
In recent quarters, the combination of deep economic recession
and political turmoil in Brazil led companies to stay away from
capital market as investors demanded higher yields.
Investors become more optimistic since mid-May after Michel
Temer was named as country's interim president, as President Dilma
Rousseff was suspended from office to face an impeachment trial.
Mr. Temer is considered a politician with a pro-investor
agenda.
Ms. Rousseff faces impeachment on charges she doctored budget
figures in previous years to hide a widening deficit, something she
denies. She could return to office if she is acquitted during the
trial, which is expected to last at least until August. But most
analysts doubt she will succeed.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
(END) Dow Jones Newswires
June 08, 2016 07:25 ET (11:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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