By Cristal Cody
Chicago, June 8 – Vale SA’s wholly owned finance company, Vale Overseas Ltd., priced $1.5 billion of 6 1/8% notes due 2033 (Baa3/BBB-/BBB) on Wednesday, according to an FWP filing with the Securities and Exchange Commission.
The parent will guarantee the notes.
The notes priced at 99.117 to yield 6.245%, or at Treasuries plus 245 basis points.
Price talk was in the Treasuries plus 275 bps area, a market source told Prospect News.
Any time before March 12, 2033, the company may redeem the notes with a Treasuries plus 40 bps make-whole premium. After that March date, the notes may be redeemed at par.
BMO Capital Markets Corp., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Scotia Capital (USA) Inc. are the global coordinators and joint bookrunners. Credit Agricole Securities (USA) Inc., MUFG Securities Americas Inc. and SMBC Nikko Securities America, Inc. are also bookrunners for the deal.
The proceeds will be used to fund a tender offer, and any remaining proceeds will be used for general corporate purposes.
Vale SA is a Rio de Janeiro-based producer of iron ore and nickel.
| Issuer: | Vale Overseas Ltd.
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| Guarantor: | Vale SA
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| Amount: | $1.5 billion
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| Issue: | Guaranteed notes
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| Maturity: | June 12, 2033
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| Bookrunners: | BMO Capital Markets Corp., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. (joint global coordinators), Credit Agricole Securities (USA) Inc., MUFG Securities Americas Inc. and SMBC Nikko Securities America, Inc.
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| Trustee: | Bank of New York Mellon
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| Counsel to issuer: | Cleary Gottlieb Steen & Hamilton LLP, Walkers (Cayman) LLP and in-house counsel
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| Counsel to underwriters: | Gibson, Dunn & Crutcher LLP and Pinheiro Guimaraes
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| Coupon: | 6 1/8%
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| Price: | 99.117
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| Yield: | 6.245%
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| Spread: | Treasuries plus 245 bps
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| Call features: | Make-whole call before March 12, 2033 at Treasuries plus 40 bps; thereafter at par
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| Trade date: | June 7
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| Settlement date: | June 12
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| Ratings: | Moody’s: Baa3
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| S&P: BBB-
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| Fitch: BBB
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| Distribution: | SEC registered
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| Price talk: | Treasuries plus 275 bps area
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| Cusip: | 91911TAR4
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