Vale’s ratings unaffected by Brazil’s negative outlook

Tuesday, 30 May 2017 00:03:19 (GMT+3)   |   Sao Paulo
       

The ratings of Brazilian miner and iron ore producer Vale have not been affected by the recent change in the Brazilian government’s bond rating outlook to negative from stable on May 26, credit rating agency Moody’s said on Tuesday.
 
Vale’s “competitive” position as the leading iron ore and nickel producer worldwide, combined with its strong business profile and a high exposure to markets outside of Brazil “support the company's positive outlook,” said Moody's Vice President and Senior Credit Officer, Barbara Mattos.
 
Vale benefits from some degree of insulation from the domestic macroeconomic environment. The company also benefits from ample access to external funding through bank debt, export credit agencies and capital markets,” Moody’s said.
 
The credit rating agency said Vale’s positive outlook incorporates Moody's expectation that Vale will “maintain a good liquidity position while reducing debt levels and remaining continually focused on cost reduction.”
 
“The outlook also reflects Moody's anticipation that Vale will continue demonstrating financial discipline around capital spending and shareholder distributions which will allow it to withstand the challenges and constraints arising from commodity price volatility for its main products,” the report noted.
 
Additionally, Moody’s said the miner’s Ba2 rating continues to be supported by the company's diversified product base and competitive cost position, and substantive portfolio of long lived assets.
 
On the other hand, Vale's ratings also incorporate the “long term overhang represented by the uncertainties regarding the level of support Vale will provide to Samarco or the outcome of existing litigations and the impact it would have on the company's liquidity and debt profile.”

Similar articles

Vale selected to begin award negotiations for US briquette plant

26 Mar | Steel News

Vale CEO to stay in position until year-end

11 Mar | Steel News

Brazilian government increases pressure on Vale to name new CEO

29 Feb | Steel News

Vale's iron ore exports up 36.8 percent in December

29 Feb | Steel News

Vale has plans to increase iron ore sales outside China

27 Feb | Steel News

Anglo American to integrate Vale’s high quality iron resources into Brazilian operations

26 Feb | Steel News

Net profit declines at Vale in 2023

23 Feb | Steel News

Dispute over Vale’s CEO position could be in final stage

06 Feb | Steel News

Iron ore production increases at Vale in 2023

30 Jan | Steel News

Vale, BHP and Samarco fined $9.7 billion in Brazil

26 Jan | Steel News