Brazil's Vale Raises $1.25 Billion from Overseas Bond Issue

SÃ O PAULO—Brazilian mining giant Vale SA raised a total of $1.25 billion from an overseas bonds issue, reinforcing the return of local companies to the international debt market arena.

Vale issued bonds due in June 2021 and it will pay an annual yield of 5.875% to investors, the company said in a statement.

"Vale will use the net proceeds of this offering for general corporate purposes, including repayment of indebtedness," the company said.

Banco Bradesco BBI; BB Securities Ltd.; HSBC Securities; Merrill Lynch; Pierce, Fenner & Smith Inc.; and Santander Investment Securities Inc. coordinated the operation.

The issue attracted a demand worth $4 billion from investors, according to a banker close to the transaction.

Vale's issue took place a few weeks after state-run oil company Petró leo Brasileiro SA, or Petrobras, and meatpacker Marfrig Global Foods SA tap the international debt market, with bond issues worth $6.75 billion and $750 million respectively.

Meanwhile, local pulp company Eldorado Brasil Celulose SA and sugar and ethanol producer Cosan SA are planning to issue bonds in the next few days, according to the banker.

In recent quarters, the combination of deep economic recession and political turmoil in Brazil led companies to stay away from capital market as investors demanded higher yields.

Investors become more optimistic since mid-May after Michel Temer was named as country's interim president, as President Dilma Rousseff was suspended from office to face an impeachment trial. Mr. Temer is considered a politician with a pro-investor agenda.

Ms. Rousseff faces impeachment on charges she doctored budget figures in previous years to hide a widening deficit, something she denies. She could return to office if she is acquitted during the trial, which is expected to last at least until August. But most analysts doubt she will succeed.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

June 08, 2016 07:25 ET (11:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.