Brazil’s Gerdau gives early results of tender for $500 million of three series of notes

By Wendy Van Sickle

Columbus, Ohio, Nov. 19 – Gerdau SA announced it received tenders totaling $389,238,000 by the early deadline of its offer to purchase for cash up to $500 million of three series of outstanding bonds, according to a company announcement on Friday.

Specifically, the bonds tendered and accepted by the early deadline, 5 p.m. ET on Nov. 18, listed by acceptance priority, level were:

• $89,726,000 of Gerdau Trade Inc.’s $517,968,000 outstanding 4¾% bonds due 2023 (Cusips: G3925DAB6, 37373WAB6) with pricing based on the 3/8% U.S. Treasury note due Oct. 31, 2023 plus 30 basis points, for a total consideration of $1,054.71 per $1,000;

• $152,717,000 of Gerdau Holdings Inc.’s $355,452,000 outstanding 5.893% bonds due 2024 (Cusips: G24422AA8, 36249SAA1) with pricing based on the 1/8% U.S. Treasury note due Jan. 15, 2024 plus 50 bps, for a total consideration of $1,103.10 per $1,000; and

• $146,795,000 GTL Trade Finance Inc.’s $650 million outstanding 4 7/8% bonds due 2027 (Cusips: G3925DAD2, 37373WAD2) with pricing based on the 1 1/8% U.S. Treasury note due Oct. 31, 2026 plus 175 bps, for a total consideration of $1,101.82 per $1,000 of notes.

There is a $200 million series limit for the last series, the 2027 notes.

In each case, the total consideration includes an early premium of $30 for each $1,000 of notes tendered by the early tender deadline.

Accrued interest will also be paid.

Pricing was set at 10 a.m. ET on Nov. 18.

Early settlement is set for Nov. 22.

The offer is subject to proration if the tender cap is exceeded or if the series cap for the 2027 bonds is exceeded.

The early deadline was also the withdrawal deadline.

The offer will expire at 11:59 p.m. ET on Dec. 3. It was announced on Nov. 4.

Final settlement is expected on Dec. 7.

Banco BTG Pactual SA – Cayman Branch (212 293-4600 or OL-DCM@btgpactual.com), BofA Securities, Inc. (646 855-8988 or 888 292-0070), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808) and Santander Investment Securities Inc. (212 940-1442 or 855 404-3636) are the dealer managers.

D.F. King & Co. (866 207-3636, 212 269-5550 or gerdau@dfking.com) is the information and tender agent.

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

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