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Bond Market News
Vale Upgraded to BBB by S&P on Improved Risk Oversight
September 17, 2025
Vale was upgraded to BBB from BBB- by S&P, as the rating agency cited Vale’s strong governance and risk controls alongside a conservative financial strategy. The upgrade follows Vale’s completion of decommissioning its last dam in August 2025 which was previously classified under emergency risk level 3. This is a major milestone in its post-Brumadinho disaster led reforms. The company now has four dams at emergency risk level 2, with full decommissioning expected by 2035. S&P noted that the management and the board has constantly emphasised the company’s derisking strategy, with executive incentives also linked to safety objectives.
S&P also cited Vale’s revised strategy of prioritization of value over volume. Vale maintains a large investment plan but also allows for capital allocation flexibility to control leverage. Vale has reduced pellet output in response to market conditions while stabilizing iron ore production, lowering nickel costs, and expanding copper capacity. S&P expects higher leverage and lower EBITDA for 2025-26, but still forecasts leverage to remain below 2x. S&P highlighted ongoing cash outflows related to dam disasters of about $3.6bn in 2025 and $2.5bn in 2026. These payments remain a financial burden, though largely directed to social and community remediation, it added.
Vale’s 7.2% 2032s were up by 0.6 points and trade at 111.2, yielding 5.3%.
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