Fitch Assigns 'BB' FC Rating to CVRD's US$300MM Issuance.

CHICAGO -- Fitch Ratings has assigned a long-term foreign currency rating of 'BB' to Vale Overseas Limited's (Vale Overseas) proposed US$300 million issuance due 2016. Vale Overseas is a wholly owned subsidiary of Companhia Vale do Rio Doce (CVRD), a large diversified mining company located in Brazil. The notes are unsecured obligations of Vale Overseas and are unconditionally guaranteed by CVRD. The obligation to guarantee the notes rank pari passu with all of CVRD's other unsecured and unsubordinated debt obligations. Fitch expects the proceeds of this issuance to be used for general corporate purposes and primarily to pay down US$300 million of Vale Overseas' 9.0% guaranteed notes due 2013.

Fitch also maintains the following ratings for CVRD and CVRD Finance Ltd., a wholly owned subsidiary of CVRD:

--CVRD foreign currency rating: 'BB', Outlook Positive;

--CVRD local currency rating: 'BBB' Outlook Stable;

--CVRD national scale rating: 'AAA(bra)', Outlook Stable;

--CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB';

--CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.

CVRD's ratings are supported by the company's strong financial profile and dominant global position as the world's largest producer and exporter of iron ore. The company's leading industry position is primarily a result of its low-cost production capabilities, its high-quality iron ore, and an extensive and integrated transportation system consisting of railways and port facilities. The fully integrated nature, from mine to port, of CVRD's operations and the high iron content of its ore, result in a competitive cost structure that provides significant protection from price fluctuations in the cyclical metals markets.

CVRD stands to benefit from favorable industry conditions characterized by a strong price environment for iron ore and a positive outlook for demand over the near to medium term. CVRD is the leading producer in the iron ore industry, followed by BHP Billiton Ltd. and Rio Tinto with operations in Australia. Consumers of iron ore face an international market dominated by just a few large rivals that have significant influence in annual iron ore price negotiations. Iron ore prices rose by about 72% in 2005 and 18% in 2004. These price increases, along with those of several other commodities, have been driven by the confluence of a relatively strong global economy and China's surging demand for raw materials. Due to constraints in mining and logistics and continued strong demand by China for higher quality imported raw materials, iron ore prices are expected to remain high in 2006 and 2007 compared with historical levels.

CVRD's strong cash generation has resulted in an improving financial profile. In the first nine months of 2005, CVRD generated operating EBITDA of US$4.8 billion and had total debt of US$3.9 billion. CVRD's ratio of total debt-to-operating EBITDA has declined to 0.6 times (x) as of Sept. 30, 2005, from 2.1x at year-end 2003, and the ratio of net debt-to-operating EBITDA has decreased to 0.4x from 1.8x over the same period.

CVRD's foreign currency rating of 'BB', Rating Outlook Positive exceeds the foreign currency rating and country ceiling of Brazil by one notch. CVRD's Rating Outlook Positive status mirrors the Rating Outlook Positive status of the foreign currency rating of the Federative Republic of Brazil, as CVRD's foreign currency ratings remain linked to the 'BB-' foreign currency rating of the sovereign.

CVRD's foreign currency rating reflects the strength of the company's iron ore exporting business and the associated hard currency generation. The rating is further supported by the company's low leverage and strong liquidity position. CVRD's consolidated cash balance of US$1.2 billion at Sept. 30, 2005, covers short-term debt by about 1.4x. Existing offshore cash balances and access to U.S. dollar credit lines help mitigate the transfer and convertibility risks associated with a 'BB-' rated sovereign. CVRD's liquidity position is supported by US$750 million in committed credit lines from an international bank consortium. The company intends to use these short-term facilities only in times of financial crisis and periods of tight liquidity. Offshore cash and funds available under committed credit facilities cover CVRD's annual debt service by about 1.0x.

CVRD, headquartered in Brazil, is the world's largest producer and exporter of iron ore and pellets, with a share of approximately 32% in the global seaborne iron ore trade of about 600 million tons. In 2004, consolidated sales totaled 231 million tons and consisted of 204 million tons of iron ore and 27 million tons of pellets. In addition to iron ore, CVRD produces nonferrous minerals and metals, provides logistics services and has strategic interests in the steel industry.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.