Vale ups tender offer cap for six series, accepts $1.31 billion notes

By Marisa Wong

Los Angeles, June 10 – Brazil’s Vale SA announced the results of its June 3 tender offer to purchase up to $1 billion of notes from six series in a news release late Thursday.

Vale amended the offer to increase the maximum purchase amount to $1,313,987,000 from $1 billion in order to accept all of the tendered notes for purchase.

The updated maximum amount includes notes tendered by the expiration of the offer at 5 p.m. ET on June 9 as well as notes tendered under guaranteed delivery procedures thus far.

The company noted that the aggregate principal amount of notes that will be purchased is subject to change based on delivery of notes under guaranteed delivery procedures, which are due by 5 p.m. ET on June 13.

As of the expiration time, holders had tendered the following amounts, with the securities listed by acceptance priority level and with the considerations per $1,000 principal amount:

• $959,616,000 of the $1,705,706,000 outstanding 6¼% guaranteed notes due 2026 (Cusip: 91911TAP8) issued by Vale Overseas Ltd. and $11,289,000 via guaranteed delivery, for a consideration of $1,075.42, based on the 2 5/8% U.S. Treasury due May 31, 2027 plus 116 basis points;

• $40,149,000 of the $681,486,000 outstanding 8¼% guaranteed notes due 2034 (Cusip: 91911TAE3) issued by Vale Overseas and $6.65 million via guaranteed delivery, for a consideration of $1,219.43, based on the 2 7/8% U.S. Treasury due May 15, 2032 plus 258 bps;

• $17,628,000 of the $296,674,000 outstanding 7.2% debentures due 2032 (Cusip: 453258AP0) issued by Vale Canada Ltd. and no notes via guaranteed delivery, for a consideration of $1,131.42 based on the 2 7/8% U.S. Treasury due May 15, 2032 plus 244 bps;

• $80,703,000 of the $1,331,222,000 outstanding 6 7/8% guaranteed notes due 2039 (Cusip: 91911TAK9) issued by Vale Overseas and $8,533,000 via guaranteed delivery, for a consideration of $1,124.29 based on the 3¼% U.S. Treasury due May 15, 2042 plus 230 bps;

• $160,239,000 of the $1,618,987,000 outstanding 6 7/8% guaranteed notes due 2036 (Cusip: 91911TAH6) issued by Vale Overseas and $20,000 via guaranteed delivery, for a consideration of $1,115.14, based on the 2 7/8% U.S. Treasury due May 15, 2032 plus 263 bps; and

• $29,113,000 of the $520,405,000 outstanding 5 5/8% notes due 2042 (Cusip: 91912EAA3) issued by Vale SA and $47,000 via guaranteed delivery, for a consideration of $980.84, based on the 3¼% U.S. Treasury due May 15, 2042 plus 235 bps.

Pricing was set at 11 a.m. ET on June 9. Holders will also receive accrued interest.

Settlement of the tender offer is expected to occur on June 14.

The company is using cash on hand to fund the tender offer.

BMO Capital Markets Corp. (833 418-0762, 212 702-1840), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106), Credit Agricole Securities (USA) Inc. (866 807-6030, 212 261-7802), MUFG Securities Americas Inc. (877 744-4532, 212 405-7481), Scotia Capital (USA) Inc. (833 498-1660, 212 225-5559) and SMBC Nikko Securities America, Inc. (888 284-9760, 212 224-5328) are the dealer managers.

D.F. King & Co., Inc. (866 796-7184, 212 269-5550, www.dfking.com/vale, at vale@dfking.com) is the information and tender agent for the offer.

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

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