...Vale S.A.'s Foreign Currency (FC) Issuer Default Rating (IDR) upgrade to `BBB+' results from the application of Fitch Ratings' Rating Above the Country Ceiling Criteria, updated in 2017, which indicates Vale is not constrained by Brazil's Country Ceiling of `BB+' as Vale's Canada operations alone generate sufficient EBITDA to cover hard currency interest expense by more than 1.0x. Vale's FC IDR is constrained by the company's Local Currency (LC) IDR, which is a reflection of the company's underlying credit quality. If Vale Canada's EBITDA/hard currency interest ratio falls below 1.0x, Vale's FC IDR would be limited to three notches above Brazil's country ceiling. This is provided Vale's exposure to transfer and convertibility continues to be mitigated by its substantial offshore earnings and assets, its substantial and recurring foreign exchange (export) earnings relative to the company's FC and declining debt burden, and its undrawn committed lines of credit from highly rated international...
