Brazil's Gerdau plans exchange offer, tender offer for 7¼%, 7% bonds

By Marisa Wong

Madison, Wis., April 9 - Gerdau SA announced plans to carry out liability management transactions soon involving outstanding 7¼% bonds due 2017 issued by wholly owned subsidiary GTL Trade Finance, Inc. and outstanding 7% bonds due 2020 issued by wholly owned subsidiary Gerdau Holdings Inc.

These transactions are expected to consist of an exchange offer for up to $1.25 billion of new securities and a separate cash tender offer for up to $250 million in total consideration, in each case for GTL's bonds and Gerdau Holdings' bonds, with priority expected to be given to GTL's bonds.

Under the exchange offer, the two existing bond issues would be exchanged for a new 10-year bond jointly issued by GTL and Gerdau Holdings. The new Rule 144A and Regulation S bonds would be guaranteed by Gerdau SA, Gerdau Acominas SA, Gerdau Acos Longos SA and Gerdau Acos Especiais SA.

Exact terms will be determined at the start of the offers.

Gerdau is a steel producer based in Porto Alegre, Brazil.

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