Vale says will repay COVID-19 loans

Vale says will repay COVID-19 loans

Corporate & Sovereign Strategy Loans Debt Structured Finance Brazil Latin America Coronavirus

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Brazilian mining conglomerate Vale said on Monday it will repay $5 billion it accessed from two revolving credit lines earlier in the year to help cushion the company from the financial impact of the COVID-19 pandemic.

Vale said it will repay $2 billion from a credit line due to mature in June 2022 and $3 billion from a credit line due to mature in December 2024, both accessed in March. 

The mining giant drew down the credit lines to boost its cash reserves to meet the "increased risks presented to the business" by the coronavirus pandemic, the company said in back in March.

Vale signed the $2 billion five-year revolver in 2017 and $3 billion five-year facility in December last year.

Four bookrunners – Citi, Crédit Agricole, RBC and Scotiabank – brought in 14 other lenders to the syndicated revolver in 2017 with a ratings grid that starts at 110 basis points over Libor and rises to 125 basis points if Vale draws 33% of the credit line and 140 basis points if it takes 60%.

For last year's loan, the bookrunners Citi, Crédit Agricole, MUFG and SMBC invited at least four other banks to participate at a spread of 90 basis points over Libor.