DBRS Assigns BBB (high) Rating with Stable Trend to Vale Overseas New Notes

DBRS has today assigned a provisional rating of BBB (high), with a Stable trend, to the proposed long-term notes due 2022 (the Guaranteed Notes) to be issued by Vale Overseas Limited (Vale Overseas) and to be irrevocably and unconditionally guaranteed as to the full and punctual payment of principal, interest, additional amounts and all other amounts that may become due and payable in respect of the Guaranteed Notes by Vale S.A. (Vale or the Company). Vale intends to use the proceeds for general corporate purposes. The Guaranteed Notes are to be issued by a reopening of Vale Overseas’ 4.375% notes due 2022.

Vale Overseas, a wholly-owned financing subsidiary of Vale, will offer the Guaranteed Notes by way of a supplemental indenture to its indenture dated as of November 21, 2006, and filed with the United States Securities and Exchange Commission. An application will be made to list the Guaranteed Notes on the New York Stock Exchange.

The Guaranteed Notes will be general obligations of Vale Overseas and are not secured by any collateral. The rights of holders of the Guaranteed Notes to payments under the Guaranteed Notes will be (1) junior to the rights of secured creditors of Vale Overseas to the extent of their interest in the assets of Vale Overseas; and (2) equal with the rights of creditors under all of Vale Overseas’ other unsecured and unsubordinated debt.

Vale will irrevocably and unconditionally guarantee the full and punctual payment of principal, interest, additional amounts and all other amounts that may become due and payable in respect of the Guaranteed Notes. Vale’s guarantee of the Guaranteed Notes will be a general obligation of Vale and is not secured by any collateral. The right to payment of holders of the Guaranteed Notes under the guarantee will be: (1) junior to the rights of secured creditors of Vale to the extent of their interest in Vale’s assets; (2) equal with the rights of creditors under all of Vale’s other unsecured and unsubordinated debt; and (3) effectively subordinated to the rights of any creditor of a subsidiary of Vale over the assets of that subsidiary.

The provisional rating listed above is based on the Vale Overseas Limited draft of the preliminary prospectus supplement dated March 28, 2012, and related documents, as well as the current financial structure, business profile, credit metrics, and market and business outlook for Vale Overseas Limited and Vale S.A., as well as other matters. The assignment of final ratings is subject to receipt by DBRS of final documentation that is consistent with that which DBRS has already received.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Companies in the Mining Industry, which can be found on our website under Methodologies.