BHP-Vale JV May Offer Equity Swap for Defaulted Samarco Bonds

Executives at Samarco Mineracao SA, the Brazilian iron-ore venture jointly owned by Vale SA and BHP Group, are studying the possibility of offering equity to clear as much as $8.8 billion of debt, according to people familiar with the matter.

The company may offer a pure equity instrument or a hybrid security, with both debt and equity characteristics, to settle $2.8 billion of obligations from overseas bonds, $1.9 billion of loans and $4.1 billion owed to the parent companies, the people said, asking not to be identified discussing confidential information. Samarco, which hasn’t made debt payments since 2016 ...