Moody’s credit rating agency said on Wednesday, 12th, the Baa2 rating and negative outlook of Vale SA are not affected by the lowering of the note of Brazil. On Tuesday, 11th, the agency downgraded the country’s rating to Baa3 and changed the outlook to negative from stable.

“The strong competitive position of Vale as the world’s largest producer of iron ore and nickel and a business that has 85% of its revenues coming from outside Brazil provide a reasonable isolation from the macroeconomic environment of the country and make the company less vulnerable to a decline in the quality of sovereign credit, ” said the Moody’s vice-president and senior analyst, Barbara Mattos.

Moreover, according to the agency, while 54% of Vale consolidated assets are concentrated in Brazil, the rest of its units are scattered in various countries such as Canada, Indonesia, Australia and Mozambique. “Nevertheless, most of the company’s revenues are generated through exports, indicating the low dependence of the Brazilian market to generate cash flow, ” Moody´s said.

According to Moody’s, Vale operations and results show that the company is exposed to macroeconomic factors in Brazil such as interest rates, exchange rates and inflation. However, the benefit “of the real devaluation more than offsets the inflationary pressure on costs.” (Source: Exame magazine)