Fitch gives GTL bond BBB-

Fitch Ratings said it assigned a BBB- rating to a proposed $1 billion 10-year bond due 2017 to be issued by GTL Trade Finance Inc., a wholly owned direct subsidiary of Gerdau SA.

The bond will be guaranteed by Gerdau and its main Brazilian subsidiaries, Fitch said, adding that the proceeds will be used primarily to repay most of the $1.15 billion in borrowings under a bridge loan facility at Gerdau Ameristeel Corp.

In September, Ameristeel, whose controlling shareholder is Gerdau, funded the $4.2 billion acquisition of the North American structural steel producer, Chaparral Steel Co. using primarily proceeds from a $2.75 billion syndicated term loan and $1.15 billion drawn under a bridge loan facility. Both loans are guaranteed by Gerdau and its main Brazilian subsidiaries, the agency added.

The acquisition financings weaken Gerdau's credit ratios to the low end of the BBB- rating category, the agency said.

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