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Vale eyes US$2.25B debt cut with redemption, buyback

Vale SA said March 14 that it plans to redeem 4.625% guaranteed notes due 2020 and launched a buyback offer for up to US$1.75 billion of its 2021 and 2022 guaranteed notes.

The 2020 notes, of which US$498.8 million remains outstanding, will be redeemed April 17.

The mining major plans to repurchase any and all of its outstanding US$1.25 billion 5.875% guaranteed notes due 2021. The company will pay US$1,086 per US$1,000 principal amount of these notes accepted for repurchase.

For the 2022 notes, of which US$2.25 billion remains outstanding, Vale will only accept up to US$1.75 billion for repurchase after deducting the principal amount of the 2021 notes tendered.

The company will pay US$1,036.50 for each US$1,000 face value of 2022 notes. The payment includes a US$30 premium for notes submitted by the early tender date of March 27.

The tender offer for 2021 notes will expire March 20, and the offer for 2022 notes will close April 11.

Vale reported net income of US$771 million for the fourth quarter of 2017, up from a year-ago net income of US$525 million, even after the effects of noncash losses on monetary and exchange rate variation, higher impairments and other results on noncurrent assets.