Credit rating agency Moody’s said this week that Vale’s recently contracted $2 billion syndicated revolving credit facility with a five-year term is credit positive for the local iron ore producer.
The credit facility, which will replace Vale’s similar line expiring in 2018, provides the miner with a longer-term liquidity cushion, Moody’s said, adding it is “complemented” by the company’s additional $3 billion in committed lines due in 2020.
“The $5 billion in total committed credit facilities, fully available as of June 2017, provide good liquidity support to Vale as part of its strategic focus on financial discipline and in line with similar facilities available to the company since 2013,” Moody’s noted.
Moody’s also noted the new credit line comes at a time Samarco has not yet resumed operations and unresolved litigations may result in “additional liabilities following the collapse of [the Samarco] dam in November 2015.”