Brazil’s Vale launches tender offer for up to $1 billion of notes

By Sarah Lizee

Olympia, Wash., Sept. 12 – Vale SA subsidiaries Vale Canada Ltd. and Vale Overseas Ltd. launched offers to purchase for cash up to $1 billion of six series of notes, according to a press release.

The following are included in the tender offer, listed in order of acceptance priority level:

• $1,594,805,000 of 6 7/8% guaranteed notes due 2039 issued by Vale Overseas, with pricing to be set using the 2 7/8% Treasury due May 15, 2049 plus 253 basis points, for a hypothetical total consideration of $1,275.09 per $1,000 of notes;

• $400 million of 7.2% debentures due 2032 issued by Vale Canada, with pricing to be set using the 1 5/8% Treasury due Aug. 15, 2029 plus 329 bps, for a hypothetical total consideration of $1,205.07 per $1,000 of notes;

• $1,809,315,000 of 6 7/8% guaranteed notes due 2036 issued by Vale Overseas, with pricing to be set using the 2 7/8% Treasury due May 15, 2049 plus 240 bps, for a hypothetical total consideration of $1,267.27 per $1,000 of notes;

• $1,809,315,000 of 6 7/8% guaranteed notes due 2036 issued by Vale Overseas, with pricing to be set using the 2 7/8% Treasury due May 15, 2049 plus 240 bps, for a hypothetical total consideration of $1,267.27 per $1,000 of notes;

• $2 billion of 6Ό% guaranteed notes due 2026 issued by Vale Overseas, with pricing to be set using the 1 5/8% Treasury due Aug. 15, 2029 plus 191 bps, for a hypothetical total consideration of $1,156.69 per $1,000 of notes;

• $544,644,000 of 8½% guaranteed notes due 2034 issued by Vale Overseas, with pricing to be set using the 1 5/8% Treasury due Aug. 15, 2029 plus 299 bps, for a hypothetical total consideration of $1,363.03 per $1,000 of notes; and

• $1,069,049,000 of 4 3/8% guaranteed notes due 2022 issued by Vale Overseas, with pricing to be set using the 1½% Treasury due Aug. 15, 2022 plus 99 bps, for a hypothetical total consideration of $1,038.98 per $1,000 of notes.

The hypothetical total considerations assume a settlement date of Sept. 30.

Holders will also receive accrued interest.

No more than $700 million of the notes due 2039, 2032 and 2036 may be accepted for purchase. There is no sub-cap for the other three series.

The offer will expire at 11:59 p.m. ET on Oct. 19.

Holders who tender their notes by the early deadline, 5 p.m. ET on Sept. 25, will be eligible to receive the total consideration, which includes the early tender premium of $50 per $1,000 of notes.

Tenders may be withdrawn before the early deadline.

Pricing will be set at 2 p.m. ET on Sept. 26.

Early settlement is expected for Sept. 30, and final settlement is expected for Oct. 11.

Dealer managers include Banco Bradesco BBI SA (646 432-6643 collect), Itau BBA USA Securities, Inc. (212 710-6749 collect), J.P. Morgan Securities LLC (212 834-3424 collect or 866 834-4666 toll free), Santander Investment Securities Inc. (212 940-1442 collect or 855 404-3636 toll free) and Scotia Capital (USA) Inc. (212 225-5559 collect or 800 372-3930 toll free).

D.F. King & Co., Inc. (212 269-5550, 866 406-2283 toll free or vale@dfking.com) is the tender and information agent.

Vale is a Rio de Janeiro-based metals and mining company.

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