--Foreign currency IDR at 'BBB-';

--Local currency IDR at 'BBB-';

--National scale rating at 'AA+(bra)' ;

--GTL Trade Finance US$600 million perpetual notes long-term rating at 'BBB-';

--GTL Trade Finance US$1.5 billion 7.25% notes due Oct. 20, 2017 long-term rating at 'BBB-'.

The Rating Outlook is Stable.

The affirmation of Gerdau's investment grade ratings amid challenging operating conditions reflects Fitch's view that Gerdau is well-positioned to withstand the global slump in steel consumption having accumulated a strong balance sheet following the preceding years of record steel demand. The ratings are also supported by the company swiftly adjusting its production output and cost structure to reflect the deteriorating market conditions since the fourth quarter of 2008 (4Q'08) and ability to swiftly resume operations to meet the gradual increase in steel demand beginning to materialize at the end of 2Q'09. Mini-mills account for approximately 75% of Gerdau's total production output, which enables the company to adjust its output swiftly to reflect current demand levels and placing it at a cost advantage when compared to major blast-furnace operators.

Good Access to Liquidity, Manageable Amortization Profile: Further supporting the ratings and Stable Outlook is Gerdau's solid liquidity position as of June 30, 2009 with cash and marketable securities of BRL6.2 billion (USD3.2 billion), of which USD1.2 billion is denominated in BRL and the remainder in USD. The company also has additional access to liquidity in the form of two committed and undrawn credit lines, together totaling over BRL2 billion (USD1 billion), comprised of an asset-backed loan of BRL1.6 billion (USD950 million) at Ameristeel's GNA Partners subsidiary level of which 57% is backed by collateral, and a BRL195 million (USD100 million) revolving credit facility at Macsteel. The maturity dates for these credit lines are Oct. 28, 2010 and May 27, 2011, respectively. Gerdau also has manageable long-term debt maturities of BRL2.5 billion (USD1.3 billion) in the second half of 2009 (2H'09) which includes the BRL800 million (USD405 million) senior notes prepayment brought forward from 2011; BRL1.9 billion (USD973 million) in 2010; and BRL2.8 billion (USD1.4 billion) in 2011. As of June 30, 2009, Gerdau's short-term debt to long-term debt ratio was 0.1 times (x).