Samarco Gets Big Response

Brazilian iron ore miner Samarco, which is jointly owned by Vale and BHP Billiton, has received over 24 proposals following its RFP for a $400m export pre-payment term loan, according to a banker with knowledge of the transaction. The issuer is looking to compile a shortlist of banks, with leads defined by the end of the week, the banker says. Samarco is said to be looking for either a 7-year or 10-year maturity, according to market participants. Lenders say such a maturity is longer than the usual 5-year, an extension likely being driven by a lack of paper in the market. The world’s second-largest exporter of iron ore pellets closed a $400m, 5-year club deal in December. BNP, HSBC, ING, RBS and SMBC committed $80m each, at a spread of 160bp over Libor. The loan was for general corporate purposes, and to help fund a $3bn expansion plan for 2011, according to bankers with knowledge of the transaction. Samarco’s parent companies approved a $3.5bn investment last week to expand production capacity at its fourth iron ore pellet plant.