Fitch lifts Gerdau notes from junk

Fitch Ratings said it has upgraded to BBB- from BB+ the $600 million 8.875% guaranteed perpetual senior notes issued by Gerdau SA in September 2005.

Fitch has also upgraded to BBB- from BB+ the rating of the proposed senior unsecured 10-year bond to be issued by GTL Trade Finance Inc., a wholly owned subsidiary of Gerdau.

These ratings actions follow the upgrade by Fitch of the foreign currency issuer default rating (IDR) of Gerdau's Brazilian operating subsidiary, Gerdau Acominas SA, to BBB- from BB+.

The perpetual notes and bonds are unconditionally and irrevocably, jointly and severally guaranteed by Gerdau and its four majority-owned Brazilian operating subsidiaries: Acominas, Gerdau Acos Longos SA, Gerdau Acos Especiais SA and Gerdau Comercial de Acos SA.

In addition, Fitch maintains a BB+ foreign currency IDR for Gerdau.

The outlook is stable.

Fitch said the rating reflects the favorable business positions of Gerdau's main steel production subsidiaries, Acominas, Acos Longos and Gerdau Ameristeel Corp., as well as the group's strong consolidated financial profile characterized by low leverage and healthy liquidity.

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