DBRS Releases Report on Vale S.A.

DBRS Limited (DBRS) has today released a report on Vale S.A. (Vale or the Company) that provides further detail on the November 23, 2015, downgrade of the ratings of the Company and its subsidiaries to BBB with Negative trends.

Vale is one of the largest mining companies in the world, with a solid business base as the world’s largest iron ore and nickel producer, as well as rising outputs of copper, fertilizers and other materials. Nonetheless, Vale’s credit metrics have deteriorated significantly, due mainly to a sharp drop in commodity prices and a high level of capital expenditures. The Company faces the ongoing challenges of low commodity prices in the near-to-medium term and the costs remaining to complete major capital projects, and it now must deal with the ramifications of a major tailings dam failure at its jointly owned Samarco operation in Brazil.

Management of debt levels in an environment of weakening commodity prices remains a clear concern. Although Vale has solid liquidity, the challenges it faces are strong and any further deterioration in commodity prices or an extended period of weak credit metrics is likely to lead to further negative rating action.

Today’s report and the November 23, 2015, press release, are available at www.dbrs.com or by contacting us at info@dbrs.com.

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