Moody’s rates Vale notes Ba3

Moody's Investors Service said it assigned a Ba3 senior unsecured foreign currency rating to the proposed senior unsecured notes due 2021 to be issued by Vale Overseas Ltd., which will be fully and unconditionally guaranteed by Vale SA.

Proceeds will be used for liability management and general corporate purposes.

The outlook is negative.

Moody’s said the Ba3 rating reflects its expectation of weaker performance over the next 12 months resulting from the substantial decline in iron ore and base metals prices observed in 2015 and early 2016 and the expectation that prices will not likely experience any meaningful recovery before 2017.

Despite the recent recovery in iron ore and base metals prices, the agency believes they will remain volatile through 2016 and into 2017, as a result of soft global economic growth, particularly in China, and iron ore supply imbalances.

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