Moody's may up Gerdau Ameristeel

Moody's Investors Service said it placed the ratings of Gerdau Ameristeel Corp. under review for possible upgrade in response to much-improved steel market conditions and the company's announcement of a common share offering, which, if successful, will finance the acquisition of certain assets of North Star Steel from Cargill Inc.

Ratings placed under review for possible upgrade include the $405 million 10.375% senior unsecured notes due 2011, currently rated B2, the senior implied rating at B1, and the senior unsecured issuer rating of B3.

On Sept. 9, Gerdau announced it had reached agreement with Cargill to purchase the land, fixed assets and working capital of four long steel product mills and four downstream facilities for $266 million in cash plus the assumption of substantially all of the liabilities of the businesses being acquired. The transaction is expected to close before the end of 2004.

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