Moody’s could drop Gerdau

Moody's Investors Service said it placed Gerdau SA's Baa3 issuer rating on review for downgrade.

At the same time, the agency placed the Baa3 ratings on the foreign currency debt issues of Gerdau Trade Inc. (guaranteed by Gerdau and its operating subsidiaries in Brazil) and on the local currency debt issues of GTL Trade Finance Inc. (guaranteed by Gerdau and its operating subsidiaries in Brazil), as well as the industrial revenue bonds issued by Jacksonville Economic Development Commission (guaranteed by Gerdau) and the solid waste disposal bonds issued by St. Paul Port Authority, Minn., (guaranteed by Gerdau) on review for downgrade.

The action follows Moody's Dec. 9 action that placed Brazil's Baa3 issuer and bond ratings on review for downgrade.

"The review process of Gerdau's Baa3 global scale ratings was prompted by the action that placed Brazil's sovereign Baa3 issuer and bond ratings on review for downgrade and by the continued weaknesses of the steel industry in Brazil, a key market for the company," Moody's vice president and senior credit officer Barbara Mattos said in a news release.

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