Cleveland-Cliffs Inc. Announces Pricing of $400,000,000 of Senior Secured Notes due 2024
06 December 2017 - 11:16AM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the
“Company”) announced today that it has priced its previously
announced private offering of $400.0 million aggregate principal
amount of its senior secured notes due 2024 (the “Secured Notes”).
The Secured Notes will bear interest at an annual rate of 4.875%
and will be issued at a price of 99.347% of their principal amount.
The offering is expected to close on December 19, 2017, subject to
satisfaction of customary closing conditions.
The Secured Notes will be jointly and severally and fully and
unconditionally guaranteed on a senior secured basis by
substantially all of Cliffs’ material domestic subsidiaries and
will be secured (subject in each case to certain exceptions and
permitted liens) by (i) a first-priority lien on substantially all
of Cliffs’ assets and the assets of the guarantors (other than
accounts receivable and other rights to payment, inventory,
as-extracted collateral, investment property, certain general
intangibles and commercial tort claims, certain mobile equipment,
commodities accounts, deposit accounts, securities accounts and
other related assets and proceeds and products of each of the
foregoing (collectively, the “ABL Collateral”)), and (ii) a
second-priority lien on the ABL Collateral, which is junior to a
first-priority lien for the benefit of the lenders under the
Company’s senior secured asset-based credit facility.
The Company intends to use the net proceeds from the offering of
the Secured Notes, along with the net proceeds from its previously
announced concurrent convertible notes offering, to finance a
substantial portion of its hot briquetted iron (“HBI”) capital
project and for general corporate purposes.
The Secured Notes offering and the concurrent offering of
convertible notes are not contingent upon one another.
This news 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. The
Secured Notes and related guarantees are being offered only to
qualified institutional buyers in reliance on the exemption from
registration set forth in Rule 144A under the Securities Act of
1933 (the “Securities Act”), and outside the United States to
non-U.S. persons in reliance on the exemption from registration set
forth in Regulation S under the Securities Act. The Secured Notes
and the related guarantees have not been, and will not be,
registered under the Securities Act, or the securities laws of any
state or other jurisdiction, and may not be offered or sold in the
United States without registration or an applicable exemption from
the Securities Act and applicable state securities or blue sky laws
and foreign securities laws.
About Cleveland-Cliffs Inc.
Founded in 1847, Cleveland-Cliffs Inc. is the largest and oldest
independent iron ore mining company in the United States. We are a
major supplier of iron ore pellets to the North American steel
industry from our mines and pellet plants located in Michigan and
Minnesota. Additionally, we operate an iron ore mining complex in
Western Australia. By 2020, Cliffs expects to be the sole producer
of hot briquetted iron (HBI) in the Great Lakes region with the
development of its first production plant in Toledo, Ohio. Driven
by the core values of safety, social, environmental and capital
stewardship, our employees endeavor to provide all stakeholders
with operating and financial transparency. For more information,
visit http://www.clevelandcliffs.com.
Forward-Looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to Cliffs’ operations and
business environment that are difficult to predict and may be
beyond our control. Such uncertainties and factors may cause actual
results to differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect Cliffs’ future performance and
cause results to differ from the forward-looking statements in this
release include, but are not limited to: uncertainty and weaknesses
in global economic conditions, including downward pressure on
prices caused by oversupply or imported products, the impact of any
reduced barriers to trade, the outcomes of recently filed and
forthcoming trade cases, reduced market demand and any change to
the economic growth rate in China; continued volatility of iron ore
and steel prices and other trends, including the supply approach of
the major iron ore producers, affecting our financial condition,
results of operations or future prospects—specifically, the impact
of price-adjustment factors on our sales contracts; our level of
indebtedness could limit cash flow available to fund working
capital, capital expenditures, acquisitions and other general
corporate purposes or ongoing needs of our business; availability
of capital and our ability to maintain adequate liquidity; our
ability to successfully conclude the Companies' Creditors
Arrangement Act (Canada) process in a manner that minimizes cash
outflows and associated liabilities; the impact of our customers’
reducing their steel production due to increased market share of
steel produced using other methods or lighter-weight steel
alternatives; uncertainty relating to restructurings in the steel
industry and/or affecting the steel industry; 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; problems or uncertainties with productivity, tons mined,
transportation, mine-closure obligations, environmental
liabilities, employee-benefit costs and other risks of the mining
industry; our ability to reach agreement with our customers
regarding any modifications to sales contract provisions, renewals
or new arrangements; our actual levels of capital spending; our
ability to successfully diversify our product mix and add new
customers beyond our traditional blast furnace clientele; our
actual economic iron ore reserves or reductions in current mineral
estimates, including whether any mineralized material qualifies as
a reserve; our ability to cost-effectively achieve planned
production rates or levels, including at our HBI production plant;
our ability to successfully identify and consummate any strategic
investments or development projects, including our HBI production
plant; our ability to obtain the investments necessary for our HBI
production plant; changes in sales volume or mix; 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; our ability to maintain
appropriate relations with unions and employees; 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; 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; risks related to
international operations; the potential existence of significant
deficiencies or material weaknesses in our internal control over
financial reporting; and our ability to complete our concurrent
convertible notes offering on terms that are commercially
attractive to us or at all.
For additional factors affecting the business of Cliffs, refer
to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K
for the year ended December 31, 2016. You are urged to carefully
consider these risk factors.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171205006488/en/
Cleveland-Cliffs Inc.MEDIA CONTACT:Patricia
Persico, 216-694-5316Director, Corporate
CommunicationsorINVESTOR CONTACT:Paul Finan,
216-694-6544Director, Investor Relations
Cleveland Cliffs (NYSE:CLF)
Historical Stock Chart
From Apr 2024 to May 2024
Cleveland Cliffs (NYSE:CLF)
Historical Stock Chart
From May 2023 to May 2024