Gerdau Trade Inc. Initiates Cash Purchase Offer for Notes Due 2027

Gerdau Trade Inc. Initiates Cash Purchase Offer for 4.875% Notes Due 2027



On June 3, 2025, Gerdau S.A. (NYSE: GGB) made a significant announcement through its wholly-owned subsidiary, Gerdau Trade Inc. The company informed stakeholders about its offer to repurchase all outstanding 4.875% notes due in 2027. This move marks a strategic decision to manage its debt obligations effectively and optimize its financial position.

Details of the Offer


The company’s acquisition proposal encompasses the entirety of the available notes, which amount to an estimated US$418.2 million. These notes have been guaranteed unequivocally by a set of affiliated entities and bear the interest rate of 4.875%, making them an attractive prospect for bondholders.

Offer Timeline and Instructions


The offer is set to close at 5 p.m. New York City time on June 9, 2025, unless a further extension is decided by the company. Consequently, all holders of the notes wishing to participate are encouraged to tender their notes before this deadline. Specifically, the terms dictate that validly tendered notes may be withdrawn up until this close unless the offer is terminated prior.

Consideration for Participating Holders


Participants who responsibly tender their notes can expect to receive a consideration amount, which will be calculated based on a fixed spread referenced against the U.S. Treasury yield on a set date. Each holder will receive accrued interest up to the settlement date, providing financial reassurance for those opting to partake in the offer.

Settlement Expectations


Settlement is anticipated to occur by June 12, 2025, unless the offer is extended again. Holders must also be aware that the offer is not bound to any minimum condition for participating notes.

Financial Strategy and Conditions


Gerdau Trade's ability to proceed with this purchase offer is contingent on securing adequate financing through a subsequent debt offering, which they intend to conduct under favorable terms. This enhances the potential for covering the cost incurred by the acquisition of the outstanding notes. The initiative reflects Gerdau Trade's commitment to maintaining liquidity and managing any financial obligations proactively.

According to the press release, Gerdau Trade reserves the discretion to amend or withdraw the offer based on market conditions or if pre-established conditions are unmet. Notably, the company has engaged several financial institutions as dealer managers to assist in the process, ensuring a seamless operation.

Conclusion


This announcement represents a pivotal move in Gerdau Trade's ongoing efforts to refine its debt structure while catering to the interests of its noteholders. Stakeholders and interested investors are advised to stay informed regarding any updates and consult appropriate channels for participation in this offer. For further information regarding the purchase offer, interested parties can access detailed documentation available through their official channels.

Topics Financial Services & Investing)

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