Announcement by Gerdau S.A. of Results of 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 the completion of its cash tender offer for the 4.875% notes due 2027 issued by Gerdau Trade Inc. The tender offer, which expired on June 9, 2025, resulted in US$237,646,000 of notes being tendered out of the US$418,244,000 outstanding. The consideration offered was US$1,007.83 per US$1,000 principal amount of notes. Following the settlement date, US$180,598,000 in notes will remain outstanding. The settlement is expected to occur on June 12, 2025. An additional US$200,000 in notes were tendered through Guaranteed Delivery Procedures. The offer was managed by BofA Securities, Goldman Sachs, J.P. Morgan Securities, and Morgan Stanley as dealer managers.

Positive

• Successfully reduced outstanding debt by US$237.6 million through the tender offer
• Tender offer price of US$1,007.83 per US$1,000 indicates company's strong financial position to manage debt
• All conditions of the offer were satisfied, demonstrating successful execution

Negative

• Company will still have US$180.6 million in notes outstanding after settlement
• Premium payment above face value represents additional cost to the company

Insights

Corporate Finance Expert

Gerdau bought back 57% of its 2027 notes at slight premium, indicating balance sheet optimization amid favorable financing conditions.

Gerdau's tender offer results show the steel producer successfully repurchased US$237.6 million (about 57%) of its outstanding 4.875% notes due in 2027, leaving US$180.6 million still in circulation. The company paid a modest premium of 0.78% above face value (US$1,007.83 per US$1,000 of principal), suggesting reasonably favorable market conditions for this debt management initiative.

This tender offer represents a strategic financial move typically aimed at optimizing Gerdau's debt profile. By repurchasing these notes before maturity, the company is likely pursuing one or more objectives: reducing future interest expenses, extending its debt maturity profile through potential refinancing at more attractive rates, or simply deploying excess cash to strengthen its balance sheet.

The substantial but incomplete uptake (57%) indicates mixed reception from bondholders. While many accepted the premium offered, a significant portion deemed the 0.78% premium insufficient compared to holding until maturity in 2027, suggesting some investors remain confident in Gerdau's credit quality or anticipate higher interest rates ahead.

This transaction demonstrates Gerdau's proactive liability management approach and indicates the company has sufficient liquidity to execute meaningful debt repurchases, which should be viewed as a sign of financial health. The modest premium paid also suggests the company executed this transaction efficiently without overpaying to retire this debt.

SÃO PAULO, June 9, 2025 /PRNewswire/ -- Gerdau S.A. ("Gerdau") (NYSE: GGB) announces the expiration of its previously announced offer 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 was made upon 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.

Information regarding the Notes and the results of the Offer is summarized in the following table:

Title of Security	CUSIP / ISIN	Principal Amount  Outstanding	Principal  Amount Tendered(1)	Principal Amount  Outstanding Following the Settlement Date(1)	Consideration(2)
4.875% Notes due 2027	G3925DAD2 / USG3925DAD24   37373WAD2 / US37373WAD20	US$418,244,000	US$237,646,000	US$180,598,000	US$1,007.83

__________________
(1)	Does not take into account US$200,000 principal amount of Notes tendered pursuant to the Guaranteed Delivery Procedures (as defined in the Offer to Purchase), which remain subject to the holders' performance of the delivery requirements under such Guaranteed Delivery Procedures.
(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) on June 9, 2025. 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 expired at 5:00 p.m., New York City time, on June 9, 2025 (the "Expiration Date").

All conditions described in the Offer to Purchase have been satisfied, and Gerdau has accepted for purchase all of the Notes validly tendered.

Settlement

Settlement of the Offer is expected to occur within three business days following the Expiration Date, which will be June 12, 2025 (the "Settlement Date").

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 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.

Disclaimer

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 was being made solely by means of the Offer Documents. The Offer was not 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 was 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

View original content:https://www.prnewswire.com/news-releases/announcement-by-gerdau-sa-of-results-of-cash-tender-offer-for-any-and-all-outstanding-4-875-notes-due-2027-issued-by-gerdau-trade-inc-302477028.html

SOURCE Gerdau S.A.

FAQ

What was the result of Gerdau's (GGB) tender offer for its 2027 notes?

Gerdau received US$237.6 million in tendered notes out of US$418.2 million outstanding, with an additional US$200,000 through guaranteed delivery procedures. The tender price was US$1,007.83 per US$1,000 principal amount.

When will Gerdau (GGB) settle the tender offer for its 2027 notes?

The settlement of the tender offer is expected to occur on June 12, 2025, which is within three business days following the June 9, 2025 expiration date.

How much will remain outstanding of Gerdau's (GGB) 2027 notes after the tender offer?

Following the settlement date, US$180,598,000 of the 4.875% notes due 2027 will remain outstanding.

What was the purchase price for Gerdau's (GGB) 2027 notes tender offer?

Gerdau offered US$1,007.83 per US$1,000 principal amount of notes, plus accrued interest.

Who were the dealer managers for Gerdau's (GGB) tender offer?

BofA Securities, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC acted as the dealer managers for the tender offer.