S&P ups Vale view to stable

S&P said it revised its outlook on S&P’s global and national scale ratings on Vale SA to stable from negative and affirmed the BBB- global scale corporate credit ratings and issue-level ratings on bonds issued through Vale Canada Ltd., Vale Overseas Ltd. and PT Vale Indonesia Tbk.

At the same time, S&P affirmed the brAAA Brazilian national scale ratings on Vale.

S&P said it has just revised upwards its price curve assumptions for iron ore, nickel and gold.

The higher prices are yielding incremental cash flows for Vale, which help alleviate the pressure on its cash flows and leverage ratios stemming from its aggressive investment plan, S&P said in a news release. In this scenario, the need for Vale to divest its assets to avoid debt from rising, in S&P’s opinion, is less necessary than before, at least from a ratings perspective.

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