Brazil's Vale to pay additional interest for mandatory convertibles

By Susanna Moon

Chicago, April 12 - Vale SA said it will pay additional interest to the holders of the mandatorily convertible notes due June 15, 2012, series VALE-2012 and VALE.P- 2012, issued by its wholly owned subsidiary Vale Capital II.

The additional interest payment was triggered when the company's board of directors approved a dividend distribution to shareholders, according to a company press release

The additional interest for the series VALE-2012 notes and series VALE.P-2012 notes will be in dollars equivalent to R$2.791486 and R$3.228658, respectively, to be converted at the Brazilian real/dollar exchange rate on April 30.

The notes will begin trading ex-dividend on the New York Stock Exchange on April 16.

Under the note terms, additional interest due to each noteholder is an amount in dollars equal to any cash distribution net of any withholding tax and fees paid of the company's American Depositary Shares - each representing one common/preferred Vale share, VALE/VALE.P - to the holder of one ADS, multiplied by the number of ADSs that would be received by the noteholder upon conversion of the notes at the conversion rate specified in the indenture, the release noted.

Vale is a Rio de Janeiro-based mining and logistics corporation.

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