Nov. 3 (Bloomberg) -- Vale SA, the Rio de Janeiro-based company that is the world’s largest iron-ore producer, sold $1 billion of 30-year bonds in its second overseas dollar note offering this year.

Vale sold the bonds to yield 2.65 percentage points above similar-maturity U.S. Treasuries, according to Bloomberg data. Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. arranged the offering, Vale said in a filing to Brazil’s securities regulator.

The company sold $1 billion of 10-year bonds abroad in September as a recovery in Latin America’s biggest economy boosts demand for the securities. Last week, Net Servicos de Comunicacao SA, Brazil’s largest cable-TV operator, sold $350 million of 10-year bonds and Banco BMG SA, a bank that specializes in loans to state retirees and workers, issued $300 million of 10-year debt.

“Vale, being a metal producer in a world that still wants to own commodity exposure, is very attractive,” said Eric Ollom, chief strategist for emerging markets at Jefferies Group Inc. in New York.

Vale is selling bonds as it seeks to boost investments. The company said Oct. 21 that it plans to increases investments 43 percent next year to $12.9 billion, including $9.03 billion in Brazil, where the company will expand iron-ore, nickel and potassium output and start producing steel slabs in a joint venture with ThyssenKrupp AG. It will use proceeds of the bond sale for general corporate purposes, Vale said in the filing.

The debt issue is the first 30-year bond Vale has sold since 2006. The yield on its 6.875 percent notes due in 2036 has dropped to 6.77 percent from 8.58 percent on May 1, according to Bloomberg data. The bond’s price climbed to 101.28 cents on the dollar from 82.10 cents during the period.

‘Saturation’

The bond sale took place as the market for Latin America corporate debt may be reaching a point of “saturation,” Ollom said.

“The market is going to need additional yield in order to help digest the supply,” he said.

Latin American companies have sold $30.1 billion bonds this year, with more than half coming from Brazilian companies, according to Bloomberg data. The companies are taking advantage of declining borrowing costs amid signs of a global recovery.

To contact the reporters responsible for this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net;

Last Updated: November 3, 2009 17:08 EST