S&P lower Vale stand-alone rating

S&P said it affirmed the global scale issuer credit and issue-level ratings on Vale SA and Vale Canada at BBB- and removed them from CreditWatch with negative implications, where they were placed in January.

The agency also said it lowered Vale's stand-alone credit profile to BBB- from BBB.

The agency also said it affirmed Vale's brAAA national scale rating.

The outlook is stable.

Vale has been proactive in repairing damages from the Brumadinho dam burst Jan. 25 and has implemented measures to assure some similar dams are quickly decommissioned, S&P said.

According to preliminary investigation outcomes, all mine audits and certifications meet safety standards, the agency said.

However, given the scope of the accident along with the Samarco dam burst in 2015, S&P said it believes shortcomings existed in the company's ability to comprehend, map, control and mitigate disposition risks.

The agency said it revised the management and governance assessment on Vale to 'weak.'

On the other hand, S&P said it believes the company is well-positioned to offset volume decline with its sound operating efficiency and cash flows amid higher metals prices.

The company also has significant cushion in its balance sheet and liquidity to absorb potential fines and liabilities, the agency said.

Vale's decision to cut dividends and executive bonuses also helped preserve liquidity, S&P said.

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