Fitch rates Gerdau bond BBB-

Fitch Ratings said it assigned a rating of BBB- to the proposed bond of up to $500 million due 2017 to be issued by GTL Trade Finance Inc., a wholly-owned direct subsidiary of Gerdau SA.

Fitch affirmed and removed from Rating Watch negative the company's foreign-currency issuer default rating at BBB-, local-currency issuer default rating at BBB-, national scale rating at AA+(bra), $600 million 8 7/8% guaranteed perpetual notes at BBB- and $1 billion 7¼% guaranteed bonds due 2017 at BBB-.

The outlook is stable.

Proceeds will be used to help repay a $1 billion bridge loan for the acquisition by Gerdau of Quanex Corp. for $1.7 billion in cash.

Fitch said the affirmation reflects the successful completion of a $1.6 billion equity offering by Gerdau in April, which will be used to replenish cash balances and reduce debt.

At Dec. 31, Gerdau had a total debt-to-EBITDA ratio pro forma of about 2.6 times.

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