CLEVELAND, Feb. 26, 2015 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today announced the commencement of
private offers to exchange up to $750
million aggregate principal amount of its newly issued 7.75%
Senior Secured Notes due 2020 (the "Senior Secured Notes") for
certain outstanding senior unsecured notes of Cliffs, upon the
terms and subject to the conditions set forth in the Company's
offering memorandum dated February 26,
2015.
The following table sets forth each series of outstanding senior
unsecured notes subject to the exchange offers (the "Existing
Notes") and indicates the acceptance priority level for such series
and the applicable consideration offered for such series in the
exchange offers for the Existing Notes (the "Exchange Offers").
Title of
Series/CUSIP Number of Existing Notes
|
Maturity
Date
|
Aggregate
Principal Amount Outstanding
|
Acceptance Cap
|
Acceptance
Priority Level
|
Principal Amount
of Senior Secured Notes(1)
|
Exchange
Consideration
|
Early Tender
Premium
|
Total Exchange
Consideration(2)
|
6.25% Senior Notes
due 2040 /
18683K AC5
|
October 1,
2040
|
$754,138,000
|
$325,000,000
|
1
|
$730.00
|
$50
|
$780.00
|
4.875% Senior Notes
due 2021 /
18683K AD3
|
April 1,
2021
|
$631,706,000
|
N/A
|
2
|
$768.75
|
$50
|
$818.75
|
4.80% Senior Notes
due 2020 /
18683K AB7
|
October 1,
2020
|
$446,226,000
|
N/A
|
3
|
$771.25
|
$50
|
$821.25
|
5.90% Senior Notes
due 2020 /
18683K AA9
|
March 15,
2020
|
$393,750,000
|
N/A
|
4
|
$810.00
|
$50
|
$860.00
|
___________________
(1) For each $1,000 principal amount of Existing Notes
(2) Includes the Early Tender Premium of
$50 in principal amount of Senior
Secured Notes
Eligible holders must validly tender their Existing Notes at or
prior to 5:00 p.m., New York City time, on March 11, 2015 (the "Early Tender Date"), in
order to be eligible to receive the applicable "Total Exchange
Consideration" shown in the table above. Existing Notes tendered
after the Early Tender Date but prior to expiration of the Exchange
Offers will be eligible to receive only the applicable "Exchange
Consideration" set out in such table, which does not include the
"Early Tender Premium".
The Exchange Offers will expire at midnight, New York City time, on March 25, 2015 (the "Expiration Date"). Tenders
of Existing Notes may not be withdrawn after 5:00 p.m., New York
City time, on March 11, 2015,
except in certain limited circumstances described in the offering
memorandum and related letter of transmittal.
Eligible holders of Existing Notes accepted for exchange in the
Exchange Offers will also receive a cash payment equal to the
accrued and unpaid interest in respect of such Existing Notes from
the applicable most recent interest payment date to, but not
including, the settlement date of the Exchange Offers. Interest on
the Senior Secured Notes will accrue from such settlement date,
which will occur promptly after the Expiration Date.
The Senior Secured Notes will be unconditionally and irrevocably
guaranteed by subsidiaries which directly or indirectly own
substantially all of our domestic assets. The Senior Secured Notes
will be secured by (1) second liens on substantially all of our
assets and the assets of the subsidiary guarantors, except for the
"ABL Collateral," which consists of accounts receivable, inventory
and other assets securing our proposed new asset-based lending
facility (the "ABL Facility"), and (2) third liens on the ABL
Collateral. Accordingly, any Existing Notes that remain outstanding
after the Exchange Offers will be structurally subordinated to the
subsidiary guarantees of the Senior Secured Notes and will be
effectively subordinated to the Senior Secured Notes to the extent
of the collateral for the Senior Secured Notes. The Existing Notes
are unsecured and are not guaranteed by any subsidiaries.
The aggregate principal amount of Senior Secured Notes to be
issued in the Exchange Offers is limited to $750 million (the "Maximum Exchange Amount"). In
the event that the Exchange Offers are oversubscribed, the
principal amounts of each series of Existing Notes that are
accepted will be determined in accordance with the "Acceptance
Priority Levels" set forth on the table above, with 1 being the
highest Acceptance Priority Level and 4 being the lowest Acceptance
Priority Level. In addition, the aggregate principal amount of
6.25% Senior Notes due 2040 to be accepted is limited to
$325 million (the "2040 Series
Cap"). Cliffs reserves the right to increase the Maximum Exchange
Amount and/or the 2040 Series Cap, although it does not currently
intend to do so.
The consummation of the Exchange Offers is conditioned upon
Cliffs having refinanced its existing revolving credit facility on
terms and conditions satisfactory to Cliffs in its discretion. This
refinancing may consist of Cliffs issuing approximately
$500 million principal amount of
senior secured first lien notes due 2020 and entering into the ABL
Facility. The ABL Facility may provide up to $550 million of senior secured borrowing
availability on a revolving basis, subject to borrowing base
limitations. The Company intends to use the net proceeds from the
refinancing for general corporate purposes. There can be no
assurance that the refinancing will be consummated or as to the
terms thereof.
The Exchange Offers are also conditioned on the satisfaction or
waiver of certain customary additional conditions, as described in
the offering memorandum and related letter of transmittal. The
Exchange Offers are not conditioned upon any minimum amount of
Existing Notes being tendered. The Exchange Offers for the Existing
Notes may be amended, extended or terminated, in each case either
as a whole, or independently with respect to any one or more
particular series of Existing Notes.
The Company has retained BofA Merrill Lynch, Jefferies, Deutsche
Bank Securities and Credit Suisse to serve as Dealer Managers for
the Exchange Offers. Questions regarding the Exchange Offers may be
directed to BofA Merrill Lynch at (888) 292-0070 (toll-free) or
(980) 388-3646 (collect). The offering memorandum and other
documents relating to the Exchange Offers will only be distributed
to holders who complete and return an eligibility form confirming
that they are (i) "qualified institutional buyers" within the
meaning of Rule 144A under the Securities Act or (ii) not "U.S.
persons" and are outside of the United
States within the meaning of Regulation S under the
Securities Act (such persons, "Eligible Holders"). Holders who
desire to obtain and complete an eligibility form should either
visit the website for this purpose at
http://www.gbsc-usa.com/eligibility/cliffs or call Global
Bondholder Services Corporation, the Information Agent and
Depositary for the Exchange Offers at (866) 470-4300 (toll-free) or
(212) 430-3774 (collect for banks and brokers).
The Company is making the Exchange Offers only by, and pursuant
to, the terms of the offering memorandum and related letter of
transmittal. Eligible Holders are urged to carefully read the
offering memorandum and related letter of transmittal before making
any decision with respect to the Exchange Offers. None of the
Company, the Dealer Managers, the Information Agent and the
Depositary make any recommendation as to whether Eligible Holders
should tender or refrain from tendering their Existing Notes.
Eligible Holders must make their own decision as to whether to
tender Existing Notes and, if so, the principal amount of the
Existing Notes to tender. The Exchange Offers are not being made to
holders of Existing Notes in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In any
jurisdiction in which the securities laws or blue sky laws require
the Exchange Offers to be made by a licensed broker or dealer, the
Exchange Offers will be deemed to be made on behalf of Cliffs by
the Dealer Managers, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
This press release does not constitute an offer to purchase
securities or a solicitation of an offer to sell any securities or
an offer to sell or the solicitation of an offer to purchase any
securities, nor does it constitute an offer or solicitation in any
jurisdiction in which such offer or solicitation is unlawful.
About Cliffs Natural Resources
Inc.
Cliffs Natural Resources Inc. is a leading mining and natural
resources company in the United
States. The Company is a major supplier of iron ore pellets
to the North American steel industry from its mines and pellet
plants located in Michigan and
Minnesota. Cliffs also operates an
iron ore mining complex in Western
Australia. Additionally, Cliffs produces low-volatile
metallurgical coal in the U.S. from its mines located in
Alabama and West Virginia.
Driven by the core values of safety, social, environmental and
capital stewardship, Cliffs' employees endeavor to provide all
stakeholders operating and financial transparency.
Forward-Looking
Statements
This release contains forward-looking statements within the meaning
of the federal securities laws. Although Cliffs believes that these
forward-looking statements and the underlying assumptions are
reasonable, we cannot assure you that they will prove to be
correct. Forward-looking statements involve a number of risks and
uncertainties, and there are factors that could cause actual
results to differ materially from those expressed or implied in our
forward-looking statements. These risk factors include without
limitation: our ability to successfully execute an exit
option for our Bloom Lake mine that minimizes the cash outflows and
associated liabilities of our Canadian operations including the
Companies' Creditors Arrangement Act (Canada) process; trends affecting our
financial condition, results of operations or future prospects,
particularly the continued volatility of iron ore and coal prices;
our actual levels of capital spending; availability of capital and
our ability to maintain adequate liquidity and successfully
implement our financing plans; uncertainty or weaknesses in global
economic conditions, including downward pressure on prices, reduced
market demand and any slowing of the economic growth rate in
China; our ability to successfully
identify and consummate any strategic investments and complete
planned divestitures; the outcome of any contractual disputes with
our customers, joint venture partners or significant energy,
material or service providers or any other litigation or
arbitration; the ability of our customers and joint venture
partners to meet their obligations to us on a timely basis or at
all; our ability to reach agreement with our iron ore customers
regarding any modifications to sales contract provisions; the
impact of price-adjustment factors on our sales contracts; changes
in sales volume or mix; our actual economic iron ore and coal
reserves or reductions in current mineral estimates, including
whether any mineralized material qualifies as a reserve; the impact
of our customers using other methods to produce steel or reducing
their steel production; events or circumstances that could impair
or adversely impact the viability of a mine and the carrying value
of associated assets, as well as any resulting impairment charges;
the results of prefeasibility and feasibility studies in relation
to projects; impacts of existing and increasing governmental
regulation and related costs and liabilities, including failure to
receive or maintain required operating and environmental permits,
approvals, modifications or other authorization of, or from, any
governmental or regulatory entity and costs related to implementing
improvements to ensure compliance with regulatory changes; our
ability to cost-effectively achieve planned production rates or
levels; uncertainties associated with natural disasters, weather
conditions, unanticipated geological conditions, supply or price of
energy, equipment failures and other unexpected events; adverse
changes in currency values, currency exchange rates, interest rates
and tax laws; our ability to maintain appropriate relations with
unions and employees and enter into or renew collective bargaining
agreements on satisfactory terms; risks related to international
operations; availability of capital equipment and component parts;
the potential existence of significant deficiencies or material
weakness in our internal control over financial reporting; problems
or uncertainties with productivity, tons mined, transportation,
mine-closure obligations, environmental liabilities,
employee-benefit costs and other risks of the mining industry; the
satisfaction of the conditions precedent to completing the Exchange
Offers, including refinancing the existing credit facility,
entering into the ABL Facility and the completion of the offering
of the New First Lien Notes, and our ability to consummate any or
all of the Exchange Offers; and other factors and risks that are
set forth in the Company's most recently filed reports with the
U.S. Securities and Exchange Commission. The information contained
herein speaks as of the date of this release and may be superseded
by subsequent events. Except as may be required by applicable
securities laws, we do not undertake any obligation to revise or
update any forward-looking statements contained in this
release.
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SOURCE Cliffs Natural Resources Inc.