Moody's revises Vale outlook to stable as iron ore prices fall
RIO DE JANEIRO Jan 29 (Reuters) - Moody's Investors Service on Thursday revised Brazilian miner Vale SA's credit outlook to stable from positive, indicating it is no longer considering an upgrade for the company's rating in the near term amid falling iron ore prices.
Lower prices for base metals come at a time when Vale, the world's largest producer of iron ore, is undergoing a large expansion phase with substantial investments, Moody's said in a statement.
"Although the company is well positioned to tolerate a lower price environment, the increase in volumes and ore grades resulting from ongoing investments ... will not be fully reflected in the company's credit metrics until 2017-2018," Moody's said.
The credit ratings agency affirmed Vale's rating at Baa2, two notches into investment-grade territory.
It also said the rating could get a lift if Vale is able to maintain or reduce its debt levels during the next 12 to 18 months while completing its expansion projects without significant cost overruns, among other conditions.
Last week, Standard & Poor's downgraded Vale's credit rating to BBB+, still one notch above Moody's Baa2, from A-. S&P said it expects Vale's risk profile to deteriorate in the next few years due to lower iron ore prices. (Reporting by Walter Brandimarte, editing by G Crosse)
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