Notice to the holders of US$ 400,000,000 7.25 % Notes due 2018 (ISIN: USG93085AA94) Issued by Usiminas Commercial Ltd.

BELO HORIZONTE, Brazil, Nov. 25, 2016 /PRNewswire/ -- Usinas Siderurgicas de Minas Gerais S.A.— USIMINAS (the "Company"), one of the largest Brazilian steelmakers with activities in the mining and logistics, capital goods, steelmaking and steel transformation industries, and its subsidiary Usiminas Commercial Ltd. (the "Issuer"), are providing this notice with respect to the Issuer's 7.25% Notes due 2018, unconditionally guaranteed by the Company, and originally issued in the aggregate principal amount of US$400,000,000 (the "Notes") pursuant to an Indenture entered into with the Bank of New York (the "Indenture"). The Notes are currently listed on the official list of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market. The Company and the Issuer hereby announce that, as part of the transactions contemplated by the recent renegotiation of the Company's indebtedness with its local and international bank lenders and debenture holders, the Company pledged its interests in and relating to its hot and cold strip mills located at its Ipatinga facility as collateral (the "Collateral") to secure the debt with certain Brazilian bank lenders and debenture holders (the "Brazilian Debt"). The mortgage deed relating to Collateral was registered by the local registry of deeds in Ipatinga, Brazil on October 19, 2016, thus perfecting the security interests of such Brazilian bank lenders and debenture holders over the Collateral.

The Company understands that the perfection of those security interests over the Collateral with respect to a portion of the Brazilian Debt amounting to R$4,707,844,513 as of September 30, 2016 could be viewed as noncompliance with the negative pledge covenant set forth in the Indenture.

As the next step in the Company's overall debt renegotiation, the Company intends to solicit consents from the holders of the Notes to waive any noncompliance with the relevant negative pledge covenant and its consequences as soon as reasonably practicable, on customary terms and conditions. The Company also intends to subsequently carry out an exchange offer for the Notes, in due course, as required by the terms of the renegotiation agreements governing the Brazilian Debt, which could involve seeking to modify the terms of the Notes and providing additional credit support on terms and conditions that are currently being discussed.

As previously disclosed by the Company, on September 12, 2016, the Company completed the renegotiation of approximately 92% of its overall indebtedness, including the Brazilian Debt, which, in the view of the Company's management, was crucial in adjusting the Company's debt profile to its short, medium and long term perspectives.

The Company's Investor Relations Department is available for any clarifications through the contacts below:

Investor Relations Department–USIMINAS
R. Prof. Jose Vieira de Mendonça, 3011 – 5º andar
Bairro Engenho Nogueira – Belo Horizonte/MG
ZIP Code 31310-260
Phone: 55 (31) 3499-8856

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Usiminas' possible or assumed future plans and intentions, including the launching of a consent solicitation and/or an exchange offer, results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and Usiminas undertakes no obligation to update publicly or to revise any forward-looking statements after it publishes this notice because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this notice might not occur and are not guarantees of future performance. Usiminas' actual results, accomplishments and performance could differ substantially from those anticipated in its forward-looking statements. 

SOURCE Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS