Moody’s assigns Baa2/Aaa.br to Vale notes

Moody's America Latina said it assigned a Baa2 global scale local currency rating and an Aaa.br national scale rating to the planned up to R$1.35 billion senior unsecured notes with varying maturity dates to be issued by Vale SA.

All other ratings remain unchanged.

The outlook is negative.

The company intends to use the proceeds to fund the logistics infrastructure of its Carajás expansion project.

The Aaa.br national scale rating reflects the standing of the company's credit quality relative to its domestic peers.

Moody’s said the Baa2 rating is supported by Vale's diversified product base and competitive cost position, and substantive portfolio of long lived assets. While Vale has diversified its geographic footprint through various acquisitions in Canada, Australia and elsewhere, the dominant revenue, earnings and cash flow driver continues to be its Brazilian based iron ore operations and its major position in the seaborne iron ore markets (Vale, Rio Tinto and BHP Billiton combined having an estimated 70% to 75% market share).

The company's adequate liquidity position (cash balance of $3.2 billion at the end of the 2015 second quarter) and $5 billion in revolving credit facilities (unused) is also a positive consideration in the rating.

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