S&P boosts CVRD

Standard & Poor's said it raised its long-term corporate credit rating on Companhia Vale do Rio Doce to BBB+ from BBB and removed it from CreditWatch positive, where it was placed June 16.

The rating on CVRD's subsidiary, Vale Inco Ltd. was also raised to BBB+ from BBB and removed from CreditWatch positive, the agency said.

The outlook is stable.

S&P noted that the rating action reflects CVRD's stronger capital structure, adding that the recent $11.45 billion global share offering adds to the company's liquidity and improves its ability to handle its aggressive capital expenditure program.

The upgrade also reflects CVRD's positive cash-flow fundamentals in the next two years, thanks to robust iron ore prices and increasing production, as well as favorable profitability in other metal commodities, S&P said, noting that the rating on CVRD reflects the company's strong business profile, characterized by its leading position in seaborne iron ore and a very favorable position in nickel.

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