Obbligazione GerdauCorp 7% ( USU37405AA20 ) in USD

Emittente GerdauCorp
Prezzo di mercato 100 USD  ▼ 
Paese  Brasile
Codice isin  USU37405AA20 ( in USD )
Tasso d'interesse 7% per anno ( pagato 2 volte l'anno)
Scadenza 20/01/2020 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Gerdau USU37405AA20 in USD 7%, scaduta


Importo minimo 100 000 USD
Importo totale 1 250 000 000 USD
Cusip U37405AA2
Standard & Poor's ( S&P ) rating BBB- ( Lower medium grade - Investment-grade )
Moody's rating N/A
Descrizione dettagliata Gerdau è un'azienda multinazionale brasiliana leader nella produzione e distribuzione di acciaio lungo e prodotti a valore aggiunto.

Analisi di un'Obbligazione Gerdau Giunta a Scadenza e Rimborsata: Il mercato dei capitali ha recentemente chiuso un capitolo relativo all'obbligazione con codice ISIN USU37405AA20 (e CUSIP U37405AA2), emessa dal gigante siderurgico brasiliano Gerdau. Questa specifica emissione è giunta a piena maturità in data 20 gennaio 2020 ed è stata interamente rimborsata, confermando la sua solvibilità e il rispetto degli impegni contrattuali con gli investitori. Gerdau è un nome di spicco nell'industria siderurgica globale, con una storia che affonda le radici in Brasile. Fondata nel 1901, l'azienda si è affermata come uno dei principali produttori mondiali di acciaio lungo e acciai speciali, con operazioni significative non solo in America Latina ma anche in Nord America e Asia. La sua vasta gamma di prodotti è impiegata in settori chiave come l'edilizia, l'agricoltura e l'industria automobilistica, rendendola un attore strategico per lo sviluppo infrastrutturale e industriale. L'obbligazione in questione, denominata in Dollari Statunitensi (USD), presentava un tasso d'interesse annuale pari al 7%, corrisposto con una frequenza semestrale, garantendo così un flusso di cassa regolare agli investitori. L'emissione totale ammontava a un volume considerevole di 1.250.000.000 USD, evidenziando la capacità di Gerdau di accedere a mercati di debito su larga scala per il finanziamento delle proprie operazioni. Per gli investitori interessati, il taglio minimo di acquisto era fissato a 100.000 USD, un valore che tipicamente orienta tali strumenti verso un pubblico di investitori istituzionali o qualificati. Il percorso di questo titolo si è concluso con successo, come testimoniato dal suo rimborso alla pari (100% del valore nominale) alla data di scadenza prestabilita, confermando il prezzo di mercato al momento del rimborso. Questo evento è una chiara indicazione della solidità finanziaria dell'emittente e della sua capacità di onorare gli impegni assunti con i detentori del debito. La solvibilità di Gerdau per questa emissione era supportata da una valutazione creditizia fornita dall'agenzia Standard & Poor's (S&P), che aveva assegnato all'obbligazione un rating di BBB-. Sebbene sia il gradino più basso della categoria 'investment grade', tale rating suggerisce una capacità adeguata dell'emittente di far fronte agli impegni finanziari, pur essendo più sensibile a condizioni economiche avverse rispetto a rating superiori. In sintesi, l'obbligazione Gerdau USU37405AA20 rappresenta un esempio di strumento di debito corporate che ha completato il suo ciclo vitale con un esito positivo per gli investitori, rafforzando la reputazione dell'emittente sul mercato internazionale.







OFFERING MEMORANDUM
U.S.$1,250,000,000
GERDAU HOLDINGS INC.
(a Delaware corporation)
17MAY200608590123
7.00% Bonds Due 2020
Unconditionally and irrevocably guaranteed by
Gerdau S.A.
Gerdau A¸cominas S.A.
Gerdau A¸cos Longos S.A.
Gerdau A¸cos Especiais S.A.
Gerdau Comercial de A¸cos S.A.
(each incorporated in the Federative Republic of Brazil)
Gerdau Holdings Inc., which we refer to as the ``Issuer,'' is offering US$1,250,000,000 aggregate principal amount of its 7.00%
guaranteed bonds, which we refer to as the ``bonds.'' The bonds will initially be sold to investors at a price equal to 98.20% of the
principal amount thereof, plus accrued interest, if any, from November 24, 2009. Interest on the bonds will accrue at a rate of 7.00%
per year and will be payable semi-annually in arrears on January 20 and July 20 of each year, commencing on July 20, 2010.
The bonds will mature on January 20, 2020. The Issuer may, at its option, redeem the bonds, in whole but not in part, at 100% of
their principal amount plus accrued interest at any time upon the occurrence of specified events relating to applicable tax law, as
described under ``Description of the Bonds--Early Redemption.'' The bonds will also be repayable prior to maturity thereof upon
the occurrence of a change of control as described herein. See ``Description of the Bonds--Covenants--Repurchase of Bonds upon
a Change of Control.''
The bonds will be unconditionally and irrevocably, jointly and severally, guaranteed by Gerdau S.A., the ultimate parent holding
company of Gerdau Holdings Inc., and its majority-owned Brazilian operating subsidiaries Gerdau A¸cominas S.A., Gerdau A¸cos
Longos S.A., Gerdau A¸cos Especiais S.A. and Gerdau Comercial de A¸cos S.A., which, collectively, we refer to as the ``Guarantors.''
The bonds will be senior unsecured obligations of the Issuer, ranking equal in right of payment with all of the Issuer's other existing
and future senior unsecured debt. The guarantees of the bonds will rank pari passu with all unsecured and unsubordinated
obligations of each of the Guarantors.
Application has been made to list the bonds in the Official List of the Luxembourg Stock Exchange and to trade the bonds on the
Euro MTF Market of that exchange, which we refer to as ``Euro MTF.'' See ``Listing and General Information.''
Investing in the bonds involves risks, see ``Risk Factors'' beginning on page 15.
Issue Price: 98.20%
plus accrued interest, if any from November 24, 2009
The bonds were delivered to purchasers in book-entry form through The Depository Trust Company and its direct and indirect
participants, including Clearstream Banking, S.A. Luxembourg and Euroclear Bank S.A./N.V., as operator of the Euroclear System,
on November 24, 2009.
The bonds and the guarantees of the bonds have not been registered under the U.S. Securities Act of 1933, as amended, which we
refer to as the ``Securities Act,'' or under any state securities laws. Therefore, the bonds may not be offered or sold within the United
States to, or for the account or benefit of, any U.S. person unless the offer or sale would qualify for a registration exemption from
the Securities Act and applicable state securities laws. Accordingly, the bonds are being offered and sold (1) to qualified institutional
buyers (as defined in Rule 144A under the Securities Act) and (2) to non-U.S. persons outside the United States in compliance with
Regulation S under the Securities Act. See ``Notice to Investors'' for additional information about eligible offerees and transfer
restrictions. To the extent that the offering of the bonds is made to persons within the European Economic Area, it shall exclusively
be made to ``qualified investors'' within the meaning of EU Directive 2003/71/EC, which we refer to as the ``Prospectus Directive,''
and therefore is exempt from the requirement to publish a compliant prospectus under the Prospectus Directive. This offering
memorandum constitutes a prospectus for the purpose of the Luxembourg Law dated July 10, 2005 on Prospectuses for Securities.
Joint Bookrunners
HSBC
Santander
Ita´
u
BofA Merrill Lynch
Citi
J.P. Morgan
Co-Managers
BB Securities
BBVA Securities
BNP PARIBAS
BRADESCO BBI
CALYON
Goldman, Sachs & Co.
Morgan Stanley
Scotia Capital
The date of this offering memorandum is January 28, 2010




You should rely only on the information contained in this offering memorandum. Neither the
Company nor the Issuer have authorized anyone to provide you with different information. The initial
purchasers are not and the Company and the Issuer are not making an offer of the bonds in any
jurisdiction where the offer is not permitted. You should not assume that the information contained in
this offering memorandum is accurate as of any date other than the date on the cover of this offering
memorandum regardless of the time of delivery of this offering memorandum or of any sale of the bonds.
_______________
TABLE OF CONTENTS
Page
PRESENTATION OF FINANCIAL AND OTHER INFORMATION .............................................................. iv
WHERE YOU CAN FIND MORE INFORMATION ........................................................................................ vi
INCORPORATION BY REFERENCE ..............................................................................................................vi
FORWARD-LOOKING STATEMENTS..........................................................................................................vii
SUMMARY ......................................................................................................................................................... 1
SUMMARY OF THE OFFERING ...................................................................................................................... 7
SUMMARY FINANCIAL AND OTHER INFORMATION OF GERDAU..................................................... 11
RISK FACTORS................................................................................................................................................ 15
USE OF PROCEEDS ......................................................................................................................................... 17
EXCHANGE RATES ........................................................................................................................................ 18
CAPITALIZATION OF GERDAU ................................................................................................................... 19
RECENT DEVELOPMENTS............................................................................................................................ 20
DESCRIPTION OF THE BONDS..................................................................................................................... 34
FORM OF BONDS ............................................................................................................................................ 51
TAXATION ....................................................................................................................................................... 55
ERISA AND CERTAIN OTHER CONSIDERATIONS ................................................................................... 59
EUROPEAN UNION DIRECTIVE ON TAXATION OF SAVINGS INCOME.............................................. 60
NOTICE TO INVESTORS ................................................................................................................................ 62
ENFORCEMENT OF CIVIL LIABILITIES ..................................................................................................... 64
PLAN OF DISTRIBUTION............................................................................................................................... 65
NOTICE TO CANADIAN RESIDENTS .......................................................................................................... 71
LEGAL MATTERS ........................................................................................................................................... 73
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS................................................................ 73
LISTING AND GENERAL INFORMATION .................................................................................................. 74
INDEX TO FINANCIAL STATEMENTS ........................................................................................................ 75

Unless otherwise indicated or the context otherwise requires, all references in this offering
memorandum to (i) "Issuer" refer to Gerdau Holdings Inc., a Delaware corporation, (ii) "Gerdau," "the
Company" or similar terms refer to Gerdau S.A., a corporation organized under the laws of the Federative
Republic of Brazil, which we refer to as "Brazil," and its consolidated subsidiaries, (iii) the "Guarantors" refer
to Gerdau S.A., Gerdau Açominas S.A., which we refer to as "Gerdau Açominas," Gerdau Aços Longos S.A.,
which we refer to as "Gerdau Aços Longos," Gerdau Aços Especiais S.A., which we refer to as "Gerdau Aços
Especiais," and Gerdau Comercial de Aços S.A., which we refer to as "Comercial Gerdau" and (iv) "Gerdau
Ameristeel" refer to Gerdau Ameristeel Corp., a corporation organized under the laws of the Province of
Ontario, Canada, and a majority-owned subsidiary of Gerdau.
The Company and the Issuer are relying on an exemption from registration under the Securities Act for
offers and sales of securities that do not involve a public offering. By purchasing bonds, you will be deemed to
have made the acknowledgments, representations, warranties and agreements described under "Notice to
Investors" in this offering memorandum.
You should understand that you will be required to bear the financial risks of your investment for an
indefinite period of time.


i



The Company and the Issuer have submitted this offering memorandum to a limited number of
investors so that they can consider a purchase of the bonds. Neither the Company nor the Issuer have authorized
its use for any other purpose. By accepting delivery of this offering memorandum, you agree to these
restrictions as well as the acknowledgements, representations and warranties described under "Notice to
Investors."
The Company and the Issuer, having made all reasonable inquiries, confirm that, as of the date of this
offering memorandum, the information contained in this offering memorandum with regard to the Issuer, the
Company and the other Guarantors is true and accurate in all material respects, that the opinions and intentions
expressed in this offering memorandum are honestly held, and that there are no other facts the omission of
which would make this offering memorandum as a whole or any of such information or the expression of any
such opinions or intentions misleading in any material respect. The Company and the Issuer accept
responsibility accordingly.
In making an investment decision, you must rely on your own examination of the Company and the
terms of the offering and the bonds, including the merits and risks involved.
In connection with this offering, the initial purchasers may over-allot bonds or effect transactions with
a view to supporting the market price of the bonds at a level higher than that which might otherwise prevail.
However, there is no assurance that the initial purchasers will undertake stabilization action. Any stabilization
action may begin on or after the date on which adequate public disclosure of the terms of the offer of the bonds
is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the
issue date of the bonds and 60 days after the date of the allotment of the bonds.
The initial purchasers assume no responsibility for, and make no representation or warranty, express or
implied, as to the accuracy or completeness of the information contained in this offering memorandum. Nothing
contained in this offering memorandum is, or shall be relied upon as, a promise or representation by the initial
purchasers as to the past or future. The initial purchasers accept no responsibility in relation to the information
contained in this offering memorandum or any other information provided by the Company, the Issuer or any of
the Guarantors in connection with the bonds.
No representation is being made to any purchaser of the bonds regarding the legality of an investment
in the bonds by such purchaser under any investment or similar laws or regulations. You should not consider
any information in this offering memorandum to be legal, business or tax advice. You should consult your own
attorney, accountant, business advisor and tax advisor for legal, financial, business and tax advice regarding an
investment in the bonds.
Neither the U.S. Securities and Exchange Commission, which we refer to as the "SEC," nor any state
securities commission has approved or disapproved of these securities or determined if this offering
memorandum is truthful or complete. Any representation to the contrary is a criminal offense.
With respect to the United Kingdom, this document is only being distributed to, and is only directed at,
(1) persons who are outside the United Kingdom, (2) investment professionals falling within Article 19(5) of the
Financial Services and Market Act 2000 (Financial Promotion) Order 2005, which we refer to as the "Order," or
(3) high net worth entities, and other persons to whom it may be lawfully communicated, falling within Article
49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons). The bonds are only
available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such bonds will
be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on
this document or any of its contents. See "Plan of Distribution."
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION
FOR A LICENSE HAS BEEN FILED UNDER RSA 421-B WITH THE STATE OF NEW HAMPSHIRE
NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS
LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE
SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE,
COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN
EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS
THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR


ii



QUALIFICATION OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY
PROSPECTIVE
PURCHASER,
CUSTOMER
OR
CLIENT
ANY
REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.


iii



PRESENTATION OF FINANCIAL AND OTHER INFORMATION
General
The Company's unaudited condensed consolidated interim financial information as of September 30,
2009 and for the nine month period ended September 30, 2009 and 2008, which are included elsewhere in this
offering memorandum, have been presented in Brazilian reais and prepared in accordance with International
Accounting Standard 34 - Interim Financial Reporting, which we refer to as "IAS 34." The Company's audited
consolidated financial statements as of December 31, 2008 and 2007, and for each of the three years ended
December 31, 2008, which are incorporated by reference in the offering memorandum to the Company's Annual
Report on Form 20-F for the year ended December 31, 2008 filed with the SEC on July 15, 2009, as amended
by Form 20-F/A filed on July 21, 2009, which we refer to as the "2008 Annual Report," have been presented in
Brazilian reais and prepared in accordance with International Financial Reporting Standards, which we refer to
as "IFRS," as issued by the International Accounting Standards Board, which we refer to as the "IASB."
Gerdau's operations are located in Argentina, Brazil, Canada, Chile, Colombia, Dominican Republic,
Guatemala, India, Mexico, Peru, Spain, the United States, Uruguay and Venezuela. The local currency is the
functional currency for those operations. The financial statements of the subsidiaries located outside Brazil,
which already prepare their financial statements in Brazilian reais, are translated from the functional currency
into Brazilian reais. Such financial statements have been translated into Brazilian reais following the criteria
established in International Accounting Standard, which we refer to as "IAS," No. 21, "The Effects of Changes
in Foreign Exchange Rates" from the financial statements expressed in the local currency of the countries where
the Company and each of its subsidiaries operate. Under such criteria assets and liabilities are translated at the
exchange rate in effect at the end of each year and average exchange rates are used for the translation of
revenues, expenses, gains and losses in the statement of income. Capital contributions, treasury stock
transactions and dividends are translated using the exchange rate as of the date of the transaction. Translation
gains and losses resulting from the translation methodology described above are recorded directly in
"Cumulative translation difference" within Equity. Gains and losses on foreign-currency denominated
transactions are included in the consolidated statements of income.
All references in this offering memorandum to "real," "reais" or "R$" are to the currency of Brazil.
All references in this offering memorandum to "U.S. dollars," "dollars" or "US$" are to the currency of the
United States of America.
Gerdau Operating Segments
Beginning with the fiscal year 2009, the Company's board of directors approved the new governance
of the Company, which established a new business segmentation, as follows: Brazil Operations (includes all
operations in Brazil, other than specialty steels), which we refer to as "Brazil Operations," North American
Operation (includes all operations in North America, except those in Mexico and specialty steels), which we
refer to as "North American Operations," Latin American Operation (includes all operations in Latin America,
except Brazil), which we refer to as "Latin American Operations," and Specialty Steel Operation (including
specialty steel operations in Brazil, Europe and the United States), which we refer to as "Specialty Steel
Operations." The unaudited condensed consolidated interim financial statements of the Company as of
September 30, 2009 and 2008, which are included elsewhere in this offering memorandum, were prepared
considering the new business segmentation as disclosed in Note 18 thereto.
Açominas and Long Steel Brazil, previously treated as separate segments, are now reported as a single
operating segment since management is no longer monitoring individual information about Açominas and Long
Steel Brazil, but rather information concerning a unified operating segment reflected as Brazil Operations.
Installed Capacity and Sales Volume
As used in this offering memorandum:
· "installed capacity" means the annual projected capacity for a particular facility (excluding
the portion that is not attributable to the Company's participation in a facility owned by a
joint venture), calculated based upon operations for 24 hours each day of a year and
deducting scheduled downtime for regular maintenance;


iv



· "tonne" means a metric tonne, which is equal to 1,000 kilograms or 2,204.62 pounds; and
· "consolidated shipments" means the combined volumes shipped from all the Company's
operations in Brazil, Latin America, North America and Specialty Steel, excluding the
Company's joint ventures and associated companies.
Rounding
The Company has made rounding adjustments to reach some of the figures included in this offering
memorandum. As a result, numerical figures shown as totals in some tables may not be an arithmetic
aggregation of the figures that preceded them.
Market Information
The Company makes statements in this offering memorandum about its competitive position and
market share in, and the market size of, the steel industry. These statements are based on statistics and other
information from third-party sources that the Company believes are reliable. The Company derived this third-
party information principally from reports published by the International Iron and Steel Institute, which we refer
to as "IISI," Brazilian Steel Institute ­ Instituto Aço Brasil, and the Commodities Research Unit, which we refer
to as the "CRU," among others. Although the Company has no reason to believe that any of this information or
these reports are inaccurate in any material respect, the Company has not independently verified the competitive
position, market share and market size or market growth data provided by third parties or by industry or general
publications. The Company takes the responsibility for the correct extraction and reproduction of this
information.


v



WHERE YOU CAN FIND MORE INFORMATION
To comply with Rule 144A under the Securities Act in connection with resale of the bonds, the Issuer
is required to furnish upon request of a holder of a bond, each a "holder," or of a prospective purchaser
designated by such holder the information required to be delivered under Rule 144A(d)(4) under the Securities
Act if, at the time of such request, the Issuer is neither a reporting company under Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended, which we refer to as the "Exchange Act," nor exempt from
reporting pursuant to Rule 12g3-2(b) thereunder. The Company will agree to furnish the information necessary
in order to permit the compliance by the Issuer with the information delivery requirements under Rule
144A(d)(4) under the Securities Act
Each of Gerdau S.A. and Gerdau Ameristeel Corporation is a reporting company subject to the
informational requirements of the Exchange Act and, in accordance therewith, files reports and other
information with the SEC. As foreign private issuers, Gerdau S.A. and Gerdau Ameristeel are exempt from the
Exchange Act rules regarding the provision and control of proxy statements and regarding short-swing profit
reporting and liability. Under a multi-jurisdictional disclosure system adopted by the United States and Canada,
Gerdau Ameristeel generally may prepare these reports and other information in accordance with the disclosure
requirements of Canada, which are different from those of the United States. Such reports and other information
can be inspected and copied at the public references facilities of the SEC at Room 1580, 100 F Street N.E.,
Washington, D.C. 20549. Copies of such material can also be obtained at prescribed rates by writing to the
Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Gerdau S.A. and Gerdau
Ameristeel file materials with, and furnish material to, the SEC electronically using the EDGAR System. The
SEC maintains an Internet site that contains these materials at www.sec.gov. In addition, such reports, proxy
statements and other information concerning Gerdau S.A. can be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, on which equity securities of Gerdau S.A. are
listed.
The Company's interim results for September 30, 2009 were submitted to the SEC on November 5,
2009 on Form 6-K and Gerdau Ameristeel's Annual Report on Form 40-F for the year ended December 31,
2008 was filed with the SEC on March 30, 2009 but neither of these filings are incorporated by reference into
this offering memorandum. You may request a copy of these filings, at no cost, by contacting Gerdau S.A. at
the number or address specified below.
INCORPORATION BY REFERENCE
The Company's 2008 Annual Report is incorporated by reference herein. You may request a copy of
this filing, at no cost, by contacting Gerdau S.A. at the number or address specified below. The 2008 Annual
Report will also be available on the website of the Luxembourg Stock Exchange at www.bourse.lu. The
indenture, dated as of November 24, 2009, among the Issuer, the Guarantors, The Bank of New York Mellon as
trustee (which term includes any successor as trustee under the indenture) and principal paying agent, transfer
agent and registrar (which terms include any successor under the indenture) and The Bank of New York Mellon
(Luxembourg) S.A., as Luxembourg Paying Agent and Transfer Agent is also incorporated by reference herein.
________________
Gerdau's principal executive office, as well as that for the other Guarantors, is at Av. Farrapos 1811,
CEP 90220-005, Porto Alegre, Rio Grande do Sul, Brazil, and the telephone number at this address is (+55-51)
3323-2000.


vi



FORWARD-LOOKING STATEMENTS
This offering memorandum contains forward-looking statements within the meaning of the Private
Securities Litigation Act of 1995. These statements relate to the Company's future prospects, developments and
business strategies.
Statements that are predictive in nature, that depend upon or refer to future events or conditions or that
include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar
expressions are forward-looking statements. Although the Company believes that these forward-looking
statements are based upon reasonable assumptions, these statements are subject to several risks and uncertainties
and are made in light of information currently available to the Company.
It is possible that the Company's future performance may differ materially from its current assessments
due to a number of factors, including the following:
·
general economic, political and business conditions in the Company's markets, both in Brazil and
abroad, including demand and prices for steel products;
·
the effects of the global financial markets and economic crisis;
·
interest rate fluctuations, inflation and exchange rate movements of the real in relation to the U.S.
dollar and other currencies in which the Company sells a significant portion of its products or in
which its assets and liabilities are denominated;
·
the Company's ability to obtain financing on satisfactory terms;
·
increases in the cost of steel scrap, energy and other raw materials;
·
excess global steel industry capacity and the availability of competitive substitute materials;
·
changes in international trade;
·
the cost of compliance with environmental and occupational health and safety laws;
·
the enactment of laws intended to reduce greenhouse gases and other air emissions;
·
electric energy shortages and government responses to them;
·
the performance of the Brazilian and the global steel industries and markets;
·
global, national and regional competition in the steel market;
·
protectionist measures imposed by steel-importing countries; and
·
other factors identified or discussed under "Item 3.D. Risk Factors," in our 2008 Annual Report,
incorporated by reference herein.
The Company's forward-looking statements are not guarantees of future performance, and the actual
results or developments may differ materially from the expectations expressed in the forward-looking
statements. As for the forward-looking statements that relate to future financial results and other projections,
actual results will be different due to the inherent uncertainty of estimates, forecasts and projections. Because of
these uncertainties, potential investors should not rely on these forward-looking statements.
The Company undertakes no obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.


vii



SUMMARY
This summary highlights information presented in greater detail elsewhere in this offering memorandum. This
summary is not complete and does not contain all the information you should consider before investing in the bonds.
You should carefully read this entire offering memorandum before investing, including "Risk Factors," the
Company's unaudited condensed consolidated interim financial statements included elsewhere in this offering
memorandum and the Company's consolidated financial statements included in its 2008 Annual Report,
incorporated by reference herein. See "Presentation of Financial and Other Information" and "Summary
Financial and Other Information of Gerdau" for information regarding the Company's unaudited condensed
consolidated interim financial statements and consolidated financial statements.
Gerdau
Overview

According to the Brazilian Steel Institute, Gerdau is Brazil's largest producer of long rolled steel. Gerdau
holds significant market share in the steel industries of almost all countries where it operates and has been classified
by Worldsteel as the world's 13th largest steel producer based on its consolidated crude steel production in 2008.
Gerdau operates steel mills that produce steel by direct iron-ore reduction (DRI) in blast furnaces and in
electric arc furnaces (EAF). In Brazil it operates three blast furnace steel mills, including its largest mill, Gerdau
Açominas, an integrated steel mill located in Ouro Branco in the state of Minas Gerais. The Company currently has
a total of 61 steel producing units globally, including joint ventures and associated companies. The joint ventures
include a unit located in the United States for the production of flat rolled steel and another unit in India. The
associated companies are Aceros Corsa in Mexico; Corporación Centroamericana del Acero in Guatemala; and
INCA in the Dominican Republic.
In the fiscal year ended December 31, 2008, approximately 34.4% of all physical sales were generated from
operations in Brazil, 40.0% from operations in North America, 11.7% from Latin American Operations (excluding
Brazil) and 13.9% from Specialty Steel operations.
As of both December 31, 2008 and September 30, 2009, total consolidated installed capacity, excluding the
Company's investments in joint ventures and associated, companies, was approximately 26 million tonnes of crude
steel and 22 million tonnes of rolled steel products. At December 31, 2008, the Company had total consolidated
assets of R$ 59.1 billion, and in 2008 its consolidated net sales were R$ 41.9 billion and total consolidated net
income was R$ 4.9 billion. At September 30, 2009, the Company had total consolidated assets of R$ 45.9 billion,
and in the nine month period ended September 30, 2009 its consolidated net sales were R$ 20.2 billion and total
consolidated net income was R$ 361 million.
Beginning with the fiscal year 2009, the Company's board of directors approved the new governance of the
Company, which established a new business segmentation, as follows: Brazil Operations (includes all operations in
Brazil, other than specialty steels), North American Operation (includes all operations in North America, except
those in Mexico and specialty steels), Latin American Operation (includes all operations in Latin America, except
Brazil) and Specialty Steel Operation (including specialty steel operations in Brazil, Spain and the United States). In
the first nine months of 2009, the Company generated approximately 36% of total net sales from its Brazilian
Operations, of this amount 68% came from domestic sales and 32% from exports. Of the total net sales 36% came
from its North American Operations, 15% from its Latin American Operations (excluding Brazil), and 13% from its
Specialty Steel Operations.
The Company offers a wide array of steel products, which are manufactured according to an extensive
variety of customer specifications. Its product mix includes crude steel (slabs, blooms and billets) sold to rolling
mills, finished products for the construction industry such as rods and structural bars, finished products for industry
such as commercial rolled steel bars and machine wire and products for farming and agriculture such as poles,
smooth wire and barbed wire. Gerdau also produces specialty steel products utilizing advanced technology and
normally with a certain degree of customization for the manufacture of tools and machinery, chains, locks and
springs, mainly for the automotive and mechanical industries.


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A significant and increasing portion of Gerdau's steel production assets is located outside Brazil,
particularly in the United States and Canada, as well as in Latin America and Spain. The Company began its
expansion into North America in 1989, when consolidation in the global steel market effectively began. The
Company currently operates 19 steel production units in the United States and Canada through its principal entity,
Gerdau Ameristeel, and believes that it is one of the market leaders in North America in terms of production of some
long steel products, such as rods, commercial rolled steel bars, extruded products and girders.
The Company's operating strategy is based on the acquisition or construction of steel mills located close to
its customers and sources of the raw materials required for steel production, such as scrap metal, pig iron and iron
ore. For this reason, most of its production has historically been geared toward supplying the local markets in which
it has production operations. However, in recent years, and especially after acquiring the Ouro Branco plant, the
Company has had a significant exposure to international markets. In the first nine months of 2009, the Company
exported 32% of its shipments from Brazil, 26% in 2008, 33% in 2007 and 36% in 2006. The Company has a
diversified list of international customers and its main export destinations include Asia, Africa and Latin America.
Through its subsidiaries and affiliates, the Company also engages in other activities related to the
production and sale of steel products, including reforestation; electric power generation projects; coking coal, iron
ore and pig iron production; and fabrication shops and downstream operations.
In 2008, approximately 13.7% of the production sold in Brazil before intercompany eliminations was
distributed through Comercial Gerdau, the Company's largest distribution channel, with 68 stores throughout Brazil,
14 fabricated reinforcing steel facilities (Prontofer) and four flat steel service centers, serving more than 120,000
customers in the year. Another important distribution channel is the network of almost 21,000 sales channels to
which Gerdau sells its products, giving it comprehensive national coverage. Sales through its distribution network
and to final industrial and construction consumers are channeled through Company employees and authorized
representatives working on commission.
The Company operates in North America through its majority-owned subsidiary, Gerdau Ameristeel. The
Company has annual manufacturing capacity of over 10.3 million tonnes of mill finished steel products. It has a
vertically integrated network of 18 steel units and one 50.0%-owned joint venture for the operation of a mini-mill,
22 scrap recycling facilities, 14 downstream operations (including three 50.0%-owned joint ventures) and 56
fabrication shops. Gerdau Ameristeel primarily serves customers in the eastern regions of the United States and
Canada. Gerdau Ameristeel's products are generally sold to steel service centers and steel fabricators or directly to
original equipment manufacturers for use in a variety of industries, including construction, automotive, mining,
cellular and electrical transmission, metal construction fabrication and equipment fabrication. Most of the raw
material feed stock for the mini-mill operations is recycled steel scrap.
The Company's Latin American Operations are comprised of 18 steel units (including joint ventures and
associated companies), 30 retail facilities, 13 fabrication shops (including joint ventures and associated companies)
and 6 scrap processing facilities located in 9 countries. The entire operation is focused on the respective domestic
markets of each country, operating mini-mill facilities with annual manufacturing capacity of 2.9 million tonnes of
finished steel products. Our Latin American Operations accounted for 11.7% of overall Gerdau shipments,
representing 2.2 million tonnes of finished products in 2008, a 0.8% decrease compared with 2007. The main
countries contributing to our Latin American Operations are Chile, Mexico, Colombia and Peru. Gerdau also
operates in the markets of Uruguay, Argentina, Dominican Republic, Venezuela and Guatemala.
Business Strategy
The Company's goal is to produce high quality steel and steel related products on a cost effective basis that
satisfies both the needs of its customers and the goals of its security holders. The Company seeks to accomplish the
foregoing through the following measures:


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