Vale Rewards Lenders with Equity Mandates

Brazilian mining giant Vale has handed banks that agreed to lend it $50bn in March to acquire Xstrata handsome equity underwriting mandates in its upcoming $14bn offering. The move is apparently a gesture to thank the bank lenders for their commitments, despite that many of the bookrunners to-be aren’t obvious choices for a deal of this scale. The follow-on is heard to be launching imminently with an updated prospectus confirming the roles. Credit Suisse is leading the process and is heard joined by a top tier of bookrunners that includes HSBC, Santander JPMorgan and Citi, say bankers. The first two took $7.3bn tickets in the Xstrata loan but are relatively new to ECM in the region. In a more junior group are banks such as BNP Paribas, RBS, Calyon, Itau BBA, Bradesco, Unibanco and Banco do Brasil, say bankers close to the process. The first three in that group are almost strictly debt shops as far as LatAm goes, and yet have garnered roles in the biggest LatAm equity deal ever filed. Noticeably absent from the group of 12 banks leading the marquee Vale deal are UBS, Morgan Stanley, Lehman Brothers, Merrill Lynch and Goldman Sachs – many of whom boast strong global equity franchises and are building up aggressively in LatAm. A Vale finance official declined to comment, citing a quiet period.