S&P keeps Gerdau Ameristeel on watch

Standard & Poor's said its BB+ corporate credit and its other ratings on Gerdau Ameristeel Corp. remain on CreditWatch with negative implications.

The agency said that the ratings were initially placed on CreditWatch on July 11, following the company's announcement that it was acquiring Chaparral Steel Co. (B+/Watch positive) for $4.2 billion in an all-cash transaction.

Although preliminary financing has been indicated, including a $2.75 billion term loan and a $1.15 billion bridge loan facility guaranteed by 66% owner Gerdau SA (BBB-/negative), longer-term financing plans at the Gerdau Ameristeel level have not been disclosed, the agency added.

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