By Rebecca Melvin
New York, July 8 - Vale SA priced $941.7 million of three-year mandatory convertible notes in two tranches after the close of markets Tuesday to yield 6.75% with an initial conversion premium of 17.5%, according to a syndicate source.
Pricing came at the cheap end of talk, which was for a coupon of 6.25% to 6.75% with an initial exchange premium of 17.5% to 22.5% for both tranches.
In tranche one, the $292.45 million of VALE-2012 notes will be converted to American Depositary Shares, each representing one common share of Vale.
In tranche two, the $649.2 million of VALE.P-2012 notes will be convertible to ADSs, each representing one preferred class A share.
Additional remuneration will be payable based on the net amount of cash distributions paid to ADS holders.
Together, the ADSs into which the two tranches are convertible will represent up to 18.42 million common shares and 47.28 million preferred class A shares.
Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. were joint bookrunners of the registered offering, which will be issued through wholly owned subsidiary Vale Capital II.
Vale will use proceeds for general corporate purposes.
The notes will be unsecured and unsubordinated obligations of Vale Capital II and will be fully and unconditionally guaranteed by Vale.
Rio de Janeiro-based Vale is a diversified metals and mining company.
| Issuers: | Vale Capital II for Vale SA
|
| Issue: | Mandatory convertible notes
|
| Total amount: | $941.7 million
|
| Maturity: | June 15, 2012
|
| Bookrunners: | Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.
|
| Interest: | 6.75%
|
| Price: | Par, $50
|
| Yield: | 6.75%
|
| Conversion premium: | 17.5%
|
| Price talk: | 6.25%-6.75%, up 17.5%-22.5%
|
| Pricing date: | July 7
|
| Settlement date: | July 13
|
| Distribution: | Registered
|
| Stock symbol: | NYSE ADS: VALE
|
| Stock reference: | $13.73
|
| Market capitalization: | $86.90 billion
|
|
|
| Tranche one
|
| Issue: | VALE-2012
|
| Amount: | $292.445 million
|
| Threshold appreciation price: | $18.66
|
| Minimum conversion rate: | 2.6797
|
| Maximum conversion rate: | 3.1486
|
|
|
| Tranche two
|
| Issue: | VALE.P-2012
|
| Amount: | $649.21 million
|
| Threshold appreciation price: | $16.13
|
| Minimum conversion rate: | 3.0993
|
| Maximum conversion rate: | 3.6417
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
