Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

EM Spreads is an independent credit research service specializing in Emerging Markets, primarily focusing on Latin American issuers.

Senior Credit Analyst - Emerging Markets

Gerdau 3Q25: North America Drives Earnings as Brazil Margins Compress

Gerdau 4Q25: North America Drives Earnings, Brazil Margins Remain Pressured

Gerdau 1Q26: North America Carries Earnings, but Valuation Limits Upside

EM Spreads

Credit

<ul>
<li>Credit improves, valuation caps upside: 2Q26 EBITDA rose 34% YoY, leverage fell to 1.32x, but 2035s at 138bps OAS leave little compensation beyond U.S. BBBs.</li>
<li>North America anchors earnings: 74% of segment EBITDA comes from North America, where strong backlog and Section 232 support offset a Brazil recovery still reliant on mix and productivity.</li>
<li>Neutral, with 2035s preferred: We favor the 5.750% 2035s for liquidity and structure, but would turn more constructive closer to 155bps OAS or on upside execution.</li>
</ul>


Credit improves, valuation caps upside: 2Q26 EBITDA rose 34% YoY, leverage fell to 1.32x, but 2035s at 138bps OAS leave little compensation beyond U.S. BBBs.
North America anchors earnings: 74% of segment EBITDA comes from North America, where strong backlog and Section 232 support offset a Brazil recovery still reliant on mix and productivity.
Neutral, with 2035s preferred: We favor the 5.750% 2035s for liquidity and structure, but would turn more constructive closer to 155bps OAS or on upside execution.


Gerdau 2Q26: North America Delivers, Brazil Starts to Turn