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.