S&P hikes outlook on Gerdau Ameristeel to "Stable"

The agency also affirmed all credit ratings on the Tampa, Fla.-based company, including its "BB+" noninvestment-grade corporate credit rating.

"The outlook revision reflects Gerdau's strong recent operating performance, partly as a result of the significant contribution from the Chaparral acquisition, solid credit metrics and currently favorable industry conditions, characterized by low import competition that has allowed steel producers to realize high prices despite slowing demand in some markets," S&P credit analyst Marie Shmaruk said in a statement.

Last fall Gerdau paid $4.22 billion for Midlothian, Texas-based Chaparral Steel Co.

Debt levels remain somewhat high, but the company has minimal near-term debt maturities and adequate free cash flow generation, she said.

Shares fell $1.09, or 5.9 percent, to $17.49 in afternoon trading.