Gerdau Outlook Revised To Stable From Negative On Significant Deleveraging; 'BBB-' Ratings Affirmed

Brazil based steel producer Gerdau has implemented a significant divestment program, which, along with working capital efforts and capex cuts, will result in significant debt reduction. We are revising the global scale outlook to stable from negative, and affirming the 'BBB-' corporate credit and issue ratings. The national scale ratings were affirmed at 'brAAA'. The stable outlook reflects our belief that the company has much improved financial flexibility to deal with the downward cycles of its business, as its idle capacity in Brazil continues to be enormous. Gerdau's business diversification is yielding resilient margins and positive free cash flow generation, which along with asset sales, should yield debt to EBITDA of around 2.5x by the end of 2018. SAO PAULO

...+ Brazil based steel producer Gerdau has implemented a significant divestment program, which, along with working capital efforts and capex cuts, will result in significant debt reduction. + We are revising the global scale outlook to stable from negative, and affirming the '###-' corporate credit and issue ratings. The national scale ratings were affirmed at 'brAAA'. + The stable outlook reflects our belief that the company has much improved financial flexibility to deal with the downward cycles of its business, as its idle capacity in Brazil continues to be enormous. Gerdau's business diversification is yielding resilient margins and positive free cash flow generation, which along with asset sales, should yield debt to EBITDA of around 2.5x by the end of 2018. SAO PAULO (S&P Global Ratings) March 27, 2018--S&P Global Ratings revised the outlooks on Gerdau S.A. (Gerdau) and Gerdau Ameristeel Corp to stable from negative, and affirmed their '###-' corporate credit ratings. We also affirmed...

Ratings Action