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

By Jennifer Chiou

New York, April 15 - Gerdau SA announced the launch of its exchange offer and concurrent cash tender offer for the $1.5 billion of 7¼% bonds due 2017 issued by wholly owned subsidiary GTL Trade Finance, Inc. and the $1.25 billion of outstanding 7% bonds due 2020 issued by wholly owned subsidiary Gerdau Holdings Inc.

The offers will end at 11:59 p.m. ET on May 8. The early tender and early exchange deadline is 5 p.m. ET on April 24.

Under the exchange offer, the two existing bond issues will be exchanged for up to $1.25 billion of new 10-year bonds jointly issued by GTL and Gerdau Holdings. The new Rule 144A and Regulation S bonds will be guaranteed by Gerdau SA, Gerdau Acominas SA, Gerdau Acos Longos SA and Gerdau Acos Especiais SA.

The exchange price for the two series will be calculated using the 2.75% Treasury due February 2024. The fixed spread will be negative 8 basis points for the 7¼% bonds and plus 167 bps for the 7% bonds.

Under the other offer, the company is tendering for up to $250 million total consideration each of the two series, with priority given to GTL's bonds.

The company will calculate the tender consideration using the 2.75% Treasury due February 2024 for both the 7¼% bonds and the 7% bonds, with fixed spreads of 20 bps and 186 bps, respectively.

Gerdau will also pay accrued interest for tendered bonds.

D.F. King & Co., Inc. is the exchange agent, tender agent and information agent (800 207-3158 or gerdau@dfking.com).

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.