LATAM WRAP-Vale, Samarco weaken over disaster costs
By Paul Kilby
NEW YORK, Dec 1 (IFR) - Bonds issued by Brazilian miner Vale widened on Tuesday as officials in New York fended off questions about the financial impact of the recent dam burst at joint venture Samarco.
The company's curve closed the day about 10bp wider, with its 2022s and 2036s trading at around 550bp and 680bp over US Treasuries respectively.
At Vale Day presentations in New York, CFO Luciano Siani put the financial impact from the dam disaster at Samarco - a joint venture between Vale and BHP Billiton - at around US$443m.
But longer-term liabilities and the extent of any potential support from shareholders remained unclear.
Fitch placed the miner's current BBB+ status on rating watch negative Tuesday, citing the uncertainty over how the dam accident might impact Vale's credit profile.
The rating agency said it thought "the high economic value of Samarco to be a major incentive in possible future financial support from shareholders".
The Brazilian government filed a lawsuit this week against both BHP Billiton and Vale for US$5.2bn-equivalent to clean up what it described as the country's worst environmental disaster, Reuters reported on Tuesday.
"We have not been served with that potential lawsuit," said Clovis Torres, Vale's general counsel. Continuación...