Gerdau Ameristeel Completes Private Offering and Loan Facility

On June 27, 2003, Gerdau Ameristeel Corporation closed a private offering in the U.S., under Rule 144A of 10 3/8 per cent senior unsecured notes due in 2011 led by J.P. Morgan Securities Inc. and Banc of America Securities, LLC as joint book-running managers and CIBC World Markets Inc. as co-lead manager, and the initial draw-down under a new senior asset based loan (ABL) facility led by The CIT Group/Business Credit Inc., CIT Business Credit Canada Inc. (owned equally by CIBC World Markets and The CIT Group) and Bank of America Securities, LLC as co-lead arrangers, Bank of America, N.A. as syndication agent, Bank of America Securities and J.P. Morgan as co-book runners and GE Canada Finance Inc. as co-documentation agent. The net proceeds from the sale of the notes totalled approximately US$389.5 million, before expenses, and cash proceeds from the initial draw down on the ABL were approximately US$142.5 million. The proceeds from the offering and the ABL were used by the Gerdau Ameristeel group to repay indebtedness under their existing credit facilities. The ABL was secured by accounts receivable and inventory.

Gerdau Ameristeel was represented in Canada and the U.S. by Torys LLP, with a team that included John Tobin, Tom Zverina and Eric So in Toronto, and Brad Cost, Alexandra Kau, Natacsha Feenstra and Bina Galal in New York acted on the ABL; John Tobin, Tim Rorabeck and Richard Johnson in Toronto and Peter Keenan in New York provided withholding tax opinions; Karrin Powys-Lybbe, Wendy Kennish and Jennifer Soward in Toronto and Brad Cost, Alexandra Kau, Hilary Paterson and Stephanie Weissglas in New York acted on the 144A offering; and Jonathan Weisz (lending), Chris Medland and Tamara Kronis (employment), Robert Mansell (environmental) in Toronto and Jeff Gracer and Karin Bonner (environmental) and Mark Adkins (corporate) in New York also assisted. Albert O’Neill, Nelson Castellano and Mike Whittaker of Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis P.A. in Tampa, Florida provided local U.S. advice.

Ernst & Young acted as tax advisors to Gerdau Ameristeel with respect to both the financing transactions and the restructuring of companies to rationalize the operations with the Co-steel business. Ernst & Young was represented by an in-house team that included Heather Kerr and Tina Korovilas (Canadian tax).

The underwriters for the senior notes and the ABL lenders were represented by Blake, Cassels & Graydon LLP, with a team that included Michael Harquail, Martin Herman and Chris Marshall (financial services) and Paul Tamaki and Leslie Morgan (tax) acted on the ABL, and Frank P. Arnone (securities) acted on the 144A offering. Arthur Robinson, Richard Fenyes and Lawrence Brin of Simpson Thacher & Bartlett LLP in New York (principal counsel) acted for the notes in the U.S. Michael Leveille, Matthew Roberts and Christopher Wilson of Troutman Sanders LLP in Atlanta, Georgia acted for the ABL lenders in the U.S.