Announcement by Gerdau S.A. of Consideration for Cash Tender Offer for Any and All Outstanding 4.875% Notes due 2027 issued by Gerdau Trade Inc.

Rhea-AI Summary

Gerdau S.A. (NYSE: GGB) has announced a cash tender offer to purchase any and all outstanding 4.875% Notes due 2027 issued by Gerdau Trade Inc. The tender offer price is set at US$1,007.83 per US$1,000 principal amount of Notes, with US$418,244,000 currently outstanding. The offer expires at 5:00 p.m., New York City time, on June 9, 2025. Holders who validly tender their notes will receive the consideration plus accrued and unpaid interest. Settlement is expected to occur on June 12, 2025. BofA Securities, Goldman Sachs, J.P. Morgan, and Morgan Stanley are acting as dealer managers for the offer.

Positive

• Company is proactively managing its debt structure through the tender offer
• Premium offer price of $1,007.83 per $1,000 principal amount provides value to noteholders
• Accrued interest will be paid to participating noteholders

Negative

• The tender offer may require significant cash outlay of up to $421.5 million if fully subscribed
• Premium pricing above par value increases the cost of the debt repurchase

Insights

Fixed Income Analyst

Gerdau's tender offer for 2027 notes at slight premium signals proactive debt management amid favorable financing conditions.

Gerdau's tender offer for its US$418.24 million in outstanding 4.875% notes due 2027 represents a strategic debt management move. The company is offering $1,007.83 per $1,000 of principal, representing a modest 0.78% premium to par value. This pricing is calculated based on a 4.02% reference yield plus a fixed spread of 50 basis points.

The premium being offered is relatively small, suggesting Gerdau is taking advantage of current market conditions to refinance or reduce its debt load without paying excessive premiums. With the notes maturing in approximately two years, this tender offer likely indicates the company is either seeking to deleverage its balance sheet or replace these notes with potentially lower-cost debt given the current interest rate environment.

The timing of this offer is notable as it allows Gerdau to manage its debt maturity profile well ahead of the 2027 due date, providing greater financial flexibility. The full, unconditional and irrevocable guarantee by multiple Gerdau entities underscores the company's commitment to honoring its debt obligations while proactively managing its capital structure.

This transaction is relatively straightforward from a fixed income perspective, with the modest premium suggesting bondholders may have limited incentive to tender unless they have specific portfolio reallocation needs. For Gerdau, this represents a disciplined approach to liability management that avoids paying excessive premiums while potentially improving its debt profile.

SÃO PAULO, June 9, 2025 /PRNewswire/ -- Gerdau S.A. ("Gerdau") (NYSE: GGB) announces the consideration to purchase for cash any and all of the outstanding 4.875% notes due 2027 (the "Notes") issued by Gerdau Trade Inc. ("Gerdau Trade"), fully, unconditionally and irrevocably guaranteed by Gerdau (by itself and as successor in interest of Gerdau Aços Especiais S.A.), Gerdau Açominas S.A. and Gerdau Aços Longos S.A. (together, the "Guarantors") (the "Offer").

The Offer is being made pursuant to the terms and subject to the conditions set forth in the offer to purchase dated June 3, 2025 (the "Offer to Purchase") relating to the Notes and the accompanying notice of guaranteed delivery.

The following table sets forth certain information relating to the Offer, including the consideration (the "Consideration") payable for the Notes accepted for purchase in the Offer for the Notes validly tendered and accepted in the Offer and the offer yield for the Notes as calculated at 11:00 a.m. (New York City time) today.

Title of Security	CUSIP / ISIN	Principal Amount Outstanding	Reference U.S. Treasury Security	Bloomberg Reference Page(1)	Fixd  Spread	Reference Yield	Consideration(2)
4.875% Notes due 2027	G3925DAD2 / USG3925DAD24   37373WAD2 / US37373WAD20	US$418,244,000.00	4.125% due 10/31/2027	FIT5	50 bps	4.020 %	US$1,007.83

	__________________
	(1)	The applicable page on Bloomberg from which the Dealer Managers (as defined below) will quote the bid side price of the Reference U.S. Treasury Security.
	(2)	Per US$1,000 principal amount of Notes validly tendered and accepted for purchase, based on the Fixed Spread (as defined in the Offer to Purchase) plus the yield calculated to the maturity date for the Notes, based on the bid-side price of the Reference U.S. Treasury Security (as defined in the Offer to Purchase) for the Notes as of 11:00 a.m. (New York City time) today. The Consideration does not include Accrued Interest (as defined in the Offer to Purchase) on the Notes, which will be payable in cash.

Information on the Offer

The Offer will expire at 5:00 p.m., New York City time, today, unless extended or earlier terminated by Gerdau Trade in its sole discretion (such time and date, as it may be extended or earlier terminated, the "Expiration Date"). Holders of Notes who validly tender (and do not validly withdraw) their Notes at or prior to the Expiration Date or deliver a properly completed and duly executed notice of guaranteed delivery and other required documents on or prior to the Expiration Date, and deliver their Notes pursuant to the guaranteed delivery procedures on or prior to the second business day following the Expiration Date, which is expected to be at 5:00 p.m., New York City time, June 11, 2025 (the "Guaranteed Delivery Date"), will be eligible to receive the Consideration. Validly tendered Notes may be validly withdrawn at any time at or prior to the Expiration Date, unless extended or earlier terminated by Gerdau Trade as described in that certain offer to purchase dated June 3, 2025, relating to the Offer (the "Offer to Purchase" and, together with the accompanying notice of guaranteed delivery, the "Offer Documents"), but not thereafter.

Holders whose Notes are accepted for purchase pursuant to the Offer, including Notes tendered pursuant to the guaranteed delivery procedures described in the Offer to Purchase, will be paid accrued and unpaid interest on the Notes ("Accrued Interest") from, and including, the last interest payment date to, but excluding, the Settlement Date (as defined below), payable on the Settlement Date (the "Accrued Coupon Payment"). For the avoidance of doubt, the Offeror will not pay Accrued Interest for any periods following the Settlement Date in respect of any Notes purchased in the Offer.

Settlement

Settlement of the Offer is expected to occur within three business days following the Expiration Date, which will be June 12, 2025, unless the Expiration Date is extended by the Offeror in its sole discretion (the "Settlement Date").

Conditions

Gerdau Trade's obligation to accept for purchase, and to pay the Consideration and the Accrued Coupon Payment is conditioned upon the satisfaction or waiver by Gerdau Trade of a number of conditions described in the Offer to Purchase. Gerdau Trade expressly reserves the right, subject to applicable law, to (i) delay accepting the Notes, extend the expiration Date for the Offer or, if the conditions set forth in the Offer to Purchase are not satisfied, terminate the Offer at any time and not accept the Notes; and (ii) if the conditions to the Offer are not satisfied, amend or modify at any time, the terms of the Offer in any respect, including by waiving, where possible, any conditions set forth in the Offer to Purchase.

For More Information

The terms and conditions of the Offer are described in the Offer Documents. Copies of the Offer Documents are available at www.dfking.com/gerdau and by request to D.F. King & Co., Inc., the tender agent and information agent for the Offer (the "Tender and Information Agent"). Requests for copies of the Offer Documents should be directed to the Tender and Information Agent at +1 (800) 628-9011 (toll free) and +1 (212) 269-5550 (collect) or by e-mail to gerdau@dfking.com.

Gerdau Trade reserves the right, in its sole discretion, not to accept any tenders of Notes for any reason. Gerdau Trade is making the Offer only in those jurisdictions where it is legal to do so.

Gerdau Trade has engaged BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC to act as the dealer managers (the "Dealer Managers") in connection with the Offer. Any questions or requests for assistance regarding the Offer may be directed to BofA Securities, Inc. collect at +1 (646) 855-8988 or toll-free (U.S. only) at +1 (888) 292-0070, Goldman Sachs & Co. LLC collect at +1 (212) 357-1452 or toll-free (U.S. only) at +1 (800) 828-3182, J.P. Morgan Securities LLC collect at +1 (212) 834-3554 / +55 11 4950 3312 or toll-free (U.S. only) at +1 (866) 834-4666 / +1 (866) 846-2874, and Morgan Stanley & Co. LLC collect at +1 (212) 761-1057 or toll-free (U.S. only) at +1 (800) 624-1808.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes as to when such intermediary would need to receive instructions from such holder in order for that holder to be able to participate in, or withdraw their instruction to participate in, the Offer, before the deadlines specified herein and in the Offer Documents.  The deadlines set by any such intermediary and the relevant clearing systems for the submission and withdrawal of tender instructions will also be earlier than the relevant deadlines specified herein and in the Offer Documents.

Disclaimer

None of Gerdau Trade, the Guarantors, the Dealer Managers, the Tender and Information Agent, the trustee for the Notes, or any of their respective affiliates, is making any recommendation as to whether holders should or should not tender any Notes in response to the Offer or expressing any opinion as to whether the terms of the Offer are fair to any holder. Holders of the Notes must make their own decision as to whether to tender any of their Notes and, if so, the principal amount of Notes to tender. Please refer to the Offer to Purchase for a description of the offer terms, conditions, disclaimers and other information applicable to the Offer.

This press release is for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any securities. The Offer is being made solely by means of the Offer Documents. The Offer is not being made to holders of the Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Gerdau Trade by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

The Offer Documents have not been filed with, and have not been approved or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer Documents or any other documents related to the Offer, and it is unlawful and may be a criminal offense to make any representation to the contrary.

This press release may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, including those related to the Offer. Forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and, accordingly, such results may differ from those expressed in any forward-looking statements.

Gerdau S.A.
Rafael Dorneles Japur
Vice-President and Investor Relations Officer

 

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SOURCE Gerdau S.A.

FAQ

What is the tender offer price for Gerdau's (GGB) 2027 Notes?

The tender offer price is US$1,007.83 per US$1,000 principal amount of the 4.875% Notes due 2027.

When does Gerdau's (GGB) tender offer expire?

The tender offer expires at 5:00 p.m., New York City time, on June 9, 2025, unless extended or terminated earlier.

What is the total outstanding amount of Gerdau's 2027 Notes being tendered?

The total principal amount outstanding of the 4.875% Notes due 2027 is US$418,244,000.

When is the settlement date for Gerdau's tender offer?

The settlement date is expected to be June 12, 2025, three business days following the expiration date.

Who are the dealer managers for Gerdau's tender offer?

BofA Securities, Goldman Sachs, J.P. Morgan Securities, and Morgan Stanley are acting as the dealer managers for the tender offer.