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S&P gives GTL bonds BBB-
Standard & Poor's said it assigned its BBB- rating to the forthcoming $1 billion senior unsecured bonds due 2017 to be issued by GTL Trade Finance Inc., a wholly owned subsidiary of Gerdau SA (BBB-/negative).
The bonds will be unconditionally and irrevocably, jointly and severally guaranteed by Gerdau, as well as by its main operating subsidiaries in Brazil, Gerdau Açominas SA, Gerdau Aços Longos SA, Gerdau Aços Especiais SA, and Gerdau Comercial de Aços SA, the agency said.
The proceeds will be mainly used to finance the acquisition of Chaparral Steel Co., the agency noted, stating that the ratings on Gerdau SA reflect the company's adequate geographic diversification through the Americas and an expanding specialty steel business, with very strong and growing market shares in Brazil and North America, respectively, the improved business profile of its North American operation and its expectation that the company will follow a prudent acquisition policy in the long term that will not consistently jeopardize its improved capital structure.
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