By Rogerio Jelmayer

SAO PAULO--Brazilian mining company Vale SA (VALE) raised $1 billion from the reopening of an overseas bonds issue, paying a lower interest rate amid strong demand from investors.

The bonds, which will mature in August 2026, will pay an annual yield of 5.20%. In the original operation, in August 2016--when Vale also raised $1 billion--it carried an annual yield of 6.25%.

Banco Bradesco BBI, BB Securities Ltd., J.P. Morgan Securities LLC, MUFG Securities Americas Inc. and Santander Investment Securities Inc. coordinated the operation.

The bonds sale attracted investors' demand worth $5.4 billion, according to a banker who declined to be named.

Vale said it will use the proceeds to repurchase 750 million euros ($804 million) of 4.375% notes set to mature in March 2018, as well as for general corporate purposes.

Vale's issue came a few weeks after state-run oil company Petroleo Brasileiro SA (PBR), or Petrobras, sold $4 billion of bonds--raising double the amount it had expected--after investor demand exceeded $20 billion.

Days later, local pulp producer Fibria Celulose SA (FIBR3.BR) and aircraft maker Embraer SA (ERJ) tapped the overseas debt market, raising a combined amount of $1.45 billion.

Investor interest in Brazilian assets has been rising on expectations of a recovery in the country's economy this year, said analysts. After two years of recession, Brazil's economy is expected to expand 0.5% this year, according to economists.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

February 07, 2017 04:17 ET (09:17 GMT)