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Samarco Mineração misses interest payment on US$500M bond

Vale SA and BHP Billiton Group joint venture Samarco Mineração SA failed to make an interest payment on a US$500 million bond that was due Sept. 26, Reuters reported, citing the trustee Bank of New York Mellon Corp.

Under the terms of the 5.375% security due in September 2024, the company will have a 30-day remedy period to make the payment, or else investors holding at least 25% of the bond could declare the principal due immediately.

The payment is said to be worth about US$13.5 million, the Sept. 26 report cited two bondholders as saying.

A Bank of New York Mellon spokesperson also confirmed in an emailed statement to the news agency that the bank did not receive any payment or further information from Samarco Mineração.

According to the analysts and bondholders, the company's decision to miss the bond payment could prompt a fresh round of debt restructuring negotiations.

The operator of the Samarco iron ore project in Brazil has been forced to halt production since a tailings dam burst in November 2015. The mine is not expected to be cleared to restart mining until at least 2017.

BHP, Vale and Samarco all declined to comment.

Earlier in September, Bloomberg News reported that the company was considering not making payments due in the current month because of a lack of funds.

Samarco Mineração was also reportedly trying to strike a deal to push back repayments on US$1.6 billion worth of bank loans until Samarco is operational again.