Moody's rates GTL Trade bonds Ba1

Moody's Investors Service said it assigned a Ba1 foreign currency rating to the roughly $450 million senior unsecured bonds due 2016 to be issued by GTL Trade Finance, Inc.

The outlook is stable.

The proposed bonds will be unconditionally, irrevocably, jointly and severally guaranteed by Gerdau SA and its Brazilian operational subsidiaries, Gerdau Acominas SA, Gerdau Acos Longos SA, Gerdau Acos Especiais SA and Gerdau Comercial de Acos SA. Proceeds from the issuance will be used to prepay existing debt, thereby reducing funding costs and improving the debt maturity profile.

Moody's said the Ba1 foreign currency rating for the new bonds reflects the Ba1 global local currency corporate family rating of Gerdau Brazil, in addition to incorporating the probability of a sovereign foreign currency default implied by the government's Ba3 foreign currency bond rating and the likelihood that, in the event of such a default, the government would impose a general foreign currency payments moratorium.

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