Nov. 18 (Bloomberg) -- Gerdau SA, Latin America’s largest steelmaker, sold $1.25 billion of 10-year bonds in overseas markets as the company prepares to boost investment in its iron- ore business, said a person familiar with the transaction.

The bonds yield 7.25 percent, according to the person, who declined to be identified because he’s not allowed to speak publicly. HSBC Holdings Plc, Banco Santander SA, Banco Itau, Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. arranged the offering, the person said.

Porto Alegre, Brazil-based Gerdau said Nov. 5 it plans to invest 9.5 billion reais ($5.5 billion) in the next five years as global demand rebounds. Chief Executive Officer Andre Gerdau Johannpeter said the company will resume investments in a 1.5 million-ton-a-year iron-ore mine in Brazil that was delayed because of the global economic slowdown.

Gerdau is the latest company in Latin American to sell bonds abroad as an economic recovery in the region boosts demand for the securities. Banco Santander Chile, the country’s biggest lender, sold $500 million of three-year bonds on Nov. 9.

The yield on Gerdau’s 7.25 percent bond maturing in 2017 has dropped to 6.90 percent from 9.13 percent on Dec. 31. The bond’s price rose to 102.11 cents on the dollar from 88.77 cents during the same period.

To contact the reporter on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net

Last Updated: November 18, 2009 13:55 EST