Vale Joins Euro Party

Vale has come through a Euorpean bond issuance window to raise EUR750 ($949m), a move that allowed it to diversify its investor pool and price inside its dollar curve. Coming the day after Mexico’s America Movil raised EUR1bn, the Brazilian miner, also keen to solidify its Euro curve, got about EUR1.8bn in orders. The new 2023 bond priced at 99.608, with a 3.75% coupon, to yield 3.798%, or MS+180bp, at the tight end of 180bp-185bp guidance that followed earlier 185bp-area talk. Bankers following the deal calculated a 5bp-10bp concession versus MS+170bp levels seen on Vale’s existing EUR 2018 bonds and calculated least 20-25bps inside its dollar curve. At least 170 accounts participated, according to bankers managing the sale, with investment managers driving bulk of demand at 55%, with banks at 15%, hedge funds 15%, insurance companies 10% and 5% allocated to others. In geographic terms, Germany comprised 29%, UK 26% France 16%, Switzerland 7%, and the Netherlands 5% with the rest allocated to other parts of Europe. BNP Paribas, Credit Agricole, HSBC, Natixis managed the sale. Vale, which is rated Baa2/BBB+/A minus, says it will use proceeds for general corporate purposes. It was its second-ever visit to the Euro bond market, following a EUR750m sale in 2010.