S&P: Gerdau on positive watch

Standard & Poor's said it placed its BB+ long-term corporate credit rating on Gerdau SA on CreditWatch with positive implications, reflecting robust consolidated business and financial performance and its expectation that the company's financial policy will remain prudent despite an acquisitive growth strategy and healthy industry conditions.

The agency said that the action also reflects its expectations for reasonable, albeit lower, pricing to continue in both the United States and Brazil for the near-to-intermediate term.

Thanks to favorable market conditions, especially in North America, Gerdau has been able to sustain an improved capital structure in the past several years while concurrently diversifying and expanding its operations, the agency added.

S&P said that Gerdau's presence in nonflat steel has substantially expanded in North America in the past years, while remaining consistently robust in Brazil and other South American markets.

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