Hefty Commitments Heard For Vale Leads

Vale has apparently requested that bookrunners on its $40bn+ Xstrata acquisition financing commit to tickets of up to $6bn. This is bigger than the average loan in LatAm, and certainly the largest commitment figure to date in the region. Commitments for the 2006 Inco acquisition deal were $1.5bn and seen as hefty at the time, when the bank market was much more liquid. Nonetheless, Santander, HSBC, BNP Paribas, Credit Suisse and RBS, via ABN AMRO, are known participants in the deal. Citi, Calyon and Lehman are also rumored to have roles. Several others are also considering ways to participate at the MLA level. And Merrill Lynch is said to have been jettisoned from the transaction after failing to stump up the cash. A short timeline is expected for the financing, with many bankers estimating a February close. However, a bid has apparently not yet been presented, and a number of obstacles remain, not least from the Brazilian government and the target’s main shareholder Glencore. The saga may also be complicated by another bidder. China Development Bank is alleged to be considering buying a stake in Xstrata, and Anglo American is another name rumored to be in the fray.