UPDATE 2-Brazil's Vale back in market after long hiatus
By Paul Kilby
NEW YORK, June 7 (IFR) - Brazilian miner Vale was poised to raise US$1.25bn in its first international bond foray in over three years on Tuesday after watching order books swell to US$4.2bn on a new five-year deal.
The iron ore miner hit the screens on another positive day for the region's debt markets, amid higher oil prices and hopes that the Fed will further delay rate hikes in the US.
"Dovish Fed comments combined with a rally in oil have made for a good two-day start to the week," one syndicate manager told IFR.
Decent demand helped the miner squeeze pricing a good 25bp from start to finish before launching the deal at a final yield of 5.875%.
At that level, pricing was almost flat to the 2022s, which were bid Monday at a yield of around 5.86%, or 12.5bp over the 5.75% fair value leads calculated for a new five-year bond.
That was not enough for some investors, who thought they could find better value further up the Vale curve, where the 2042s have been trading 7.645%.
"We expect some curve flattening and find the long end more attractive," said one, who reckoned the new deal helps relieve some of the liquidity concerns surrounding the credit. Continuación...