S&P rates Gerdau Trade bonds BBB-

Standard & Poor's said it assigned a BBB- senior unsecured debt rating to Gerdau Trade Inc.'s forthcoming issuance of senior unsecured bonds.

Gerdau Trade is direct subsidiary of Gerdau SA, which has BBB- ratings and a negative outlook. Gerdau guarantees the bonds, as will its main operating subsidiaries in Brazil.

The proceeds will be used to refinance existing debt and general corporate purposes.

The ratings reflect the company's diversification both geographically and in terms of product, S&P said.

The agency said it expects the company to follow a prudent acquisition policy in the long term that will not jeopardize its capital structure.

The exposure to the volatile and cyclical commodity long-steel industry, an acquisitive growth strategy and a sizable capital budget during the next years to be invested in brownfield capacity expansions partially offset the positives, the agency said.

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