S&P affirms Gerdau, Gerdau Ameristeel

Standard & Poor’s said it affirmed its BBB- global scale and brAAA Brazil national scale ratings on Gerdau SA (Gerdau). S&P also affirmed its BBB- rating on Gerdau Ameristeel Corp., Gerdau’s U.S. subsidiary.

The outlooks on all the ratings remains stable.

S&P said the ratings affirmation reflects Gerdau’s geographic diversification, efficient operation and its wide scope of products and end markets, which have resulted in resilient margins and cash flows despite weaker demand for steel products in Brazil and a more competitive environment in the U.S. amid high supply and inventory levels.

S&P said it also views Gerdau’s “strong” liquidity position, smooth debt amortization profile and a large operation outside Brazil as key factors for the company to potentially have a higher rating than the foreign currency rating on Brazil (BBB-/negative/A-3).

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