November 25, 2009 (FinancialWire) — Gerdau Ameristeel Corp. (NYSE: GNA) said it has entered into a loan agreement pursuant to which a wholly-owned subsidiary will borrow $610 million on arm’s length terms from Gerdau Holdings Inc., a subsidiary of Gerdau S.A.

The loan, which is expected to be funded on December 3, 2009, will be a senior, unsecured obligation of the obligors, will bear interest at 7.95% per annum, has no scheduled principal payments prior to maturity, and will mature in full on January 20, 2020. Interest will be payable semiannually, starting on July 20, 2010.

Gerdau said the amount borrowed represents approximately 50% of the proceeds of the $1.25 billion of bonds issued by Gerdau Holdings Inc. on November 18, 2009.

The company plans to use the net proceeds of the loan to prepay $510 million of its outstanding Tranche A term debt and $100 million of its outstanding Tranche C term debt and the company said it has notified the holders of such term debt of its intent to prepay such amounts.

Florida-based Gerdau Ameristeel is a mini-mill steel producer in North America with annual manufacturing capacity of approximately 12 million tons of mill finished steel products.

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