Gerdau Pricing Heard

Gerdau, the largest producer of long steel in the Americas, is offering a spread of 180bp over Libor for its $1bn 3-year club deal, according to market participants. Bank of America Merrill Lynch, Bank of Tokyo Mitsubishi, BBVA, BNP Paribas, Citi, HSBC, and Santander are heard to be the banks involved in the transaction. The deal is composed of 2 tranches of $500m each. The loan is for working capital purposes, and will replace other short-term bilateral loans. The first tranche be used by its US and Canada subsidiaries, with the second tranche to be used by its other subsidiaries, mainly in Chile, Peru, Colombia, Mexico and Spain. Execution and closing of the deal is expected by the end of March, according to a banker with knowledge of the transaction.