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Brazil’s Gerdau accepts tenders for $587 million of two note issues
By Susanna Moon
Chicago, Oct. 19 – Gerdau SA announced the early results of its capped tender for three series of notes, which has been oversubscribed as of 5 p.m. ET on Oct. 18.
As announced, the company began tendering for up to $500 million maximum amount of the three note issues on Oct. 4 and then raised the payment cap to $640 million on Oct. 13.
The early tender tally is as follows with the notes listed in order of priority acceptance levels and the total purchase price for each $1,000 principal amount:
• $551,653,000 of the $1.25 billion 5¾% bonds due 2021 issued by Gerdau Trade Inc. with a total purchase price of $1,090; and
• $235,898,000 of the $638,603,000 7% bonds due 2020 issued by Gerdau Holdings Inc. with a total purchase price of $1,096.25;
• $127,236,000 of the 5.893% bonds due 2024 issued by Gerdau Holdings Inc. and GTL Trade Finance Inc. with a tender sub-cap of $75 million.
The total purchase prices include an early tender premium of $30.00 for each $1,000 principal amount of notes tendered by the early deadline.
Holders also will pay accrued interest to but excluding the settlement date.
Gerdau accepted for purchase all of the tendered 5¾% bonds, $35,299,000 of the 7% bonds and none of the 5.893% bonds after satisfying the financing condition, according to a company update on Thursday.
Settlement is expected to occur Oct. 23.
Tendered notes may not be withdrawn after the early deadline.
The tender offer will expire at 11:59 p.m. ET on Nov. 1.
When accepting the notes for purchase, Gerdau will give priority to notes tendered before the early deadline regardless of priority level.
The dealer managers are Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636). The information and tender agent is Global Bondholder Services Corp. (212 430-3774 or 866 470-4200).
Gerdau is a steel producer based in Porto Alegre, Brazil.
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