Vale to pay added interest for mandatory convertibles due 2010, 2012

By Susanna Moon

Chicago, Oct. 16 - Vale SA said it will pay additional interest to holders of the mandatorily convertible notes due June 15, 2010, series RIO and RIO P, and to the holders of the mandatorily convertible notes due June 15, 2012, series VALE-2012 and VALE.P-2012, issued by its wholly owned subsidiaries Vale Capital and Vale Capital II, respectively.

Vale said the additional interest payment was triggered by the board of directors' approval of a dividend distribution to shareholders.

The additional interest paid per series RIO notes and per series RIO P notes will be equal to an amount in dollars of R$0.857161 and R$1.017334, respectively.

The additional interest paid per series VALE-2012 notes and per series VALE.P-2012 notes will be equal to an amount in dollars of R$1.236080 and R$1.429662, respectively.

The amounts will be converted at the Brazilian real/dollar exchange rate on Oct. 30.

The notes will begin trading ex-dividend on the New York Stock Exchange on Friday.

Under the note indentures, additional interest due to each noteholder is an amount in dollars equal to any cash distribution paid by the depositary of the American Depositary Shares.

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

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