Gerdau Takes $2.75bn Loan to Retail

Brazilian steelmaker Gerdau has clinched participation from 12 banks for its $2.75bn acquisition financing and will today launch the deal to general syndication with a meeting in New York, followed by one in São Paulo Wednesday. In addition to bookrunners JPMorgan, HSBC and ABN AMRO, nine have joined as MLAs with $300m tickets apiece: BBVA, Standard Chartered, Tokyo Mitsubishi, Sumitomo, Mizuho, BofA, Itaú, Banco do Brasil and WestLB. The loan includes a 5-year trade related piece at Libor plus 100bp, a 6-year trade piece at Libor plus 125bp and a 5-year working capital facility at the same spread. The transaction is described by loan market participants as highly successful, considering it is the first to be launched following the August credit meltdown. Pricing was attractive enough to draw in a decent number of banks, and all 12 participants can expect to be reduced significantly. Gerdau is using proceeds to buy Chaparral Steel in the US.