Item 1.01
Entry into a Material Definitive Agreement
.
Common Stock Offering
On November 1, 2016, AK
Steel Holding Corporation (“AK Holding”) completed the public offering (the “Offering”) of 74,750,000 shares of common stock, par value $0.01 (the “Common Stock”), including the exercise in full of an
over-allotment option of 9,750,000 shares of Common Stock.
The Common Stock was issued pursuant to an underwriting agreement (the “Underwriting
Agreement”), dated as of October 26, 2016, between AK Holding and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the underwriters named therein (the
“Underwriters”).
Pursuant to the Underwriting Agreement and subject to its terms and conditions, AK Holding agreed to sell the Common Stock to
the Underwriters, and the Underwriters agreed to purchase the Common Stock for resale to the public. The Common Stock was sold pursuant to a registration statement on Form S-3 (File No. 333-210785), filed on April 15, 2016 (as amended by
Post-Effective Amendment No. 1 filed on June 13, 2016, the “Registration Statement”) by AK Holding and three of its subsidiaries: AK Steel Corporation (“AK Steel”), AK Steel Properties, Inc. and AK Tube LLC. A copy of
the Underwriting Agreement is filed as Exhibit 1.1 hereto and incorporated by reference herein.
AK Holding expects to receive net proceeds from the
Offering, after underwriting discounts and commissions and estimated offering fees and expenses, of approximately $350.6 million. AK Holding intends to use the net proceeds from the Offering to repay outstanding borrowings under AK Steel’s $1.5
billion asset-based revolving credit facility (the “Credit Facility”) and for general corporate purposes.
Other Relationships
An affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated serves as agent under the Credit Facility and each of the Underwriters
or their affiliates are lenders under the Credit Facility and will receive a portion of the proceeds from the Offering as a result of such repayment.
In
addition, the Underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management,
investment research, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and
investment banking services for AK Holding, AK Steel or their affiliates, for which they received or will receive customary fees and expenses.
In
addition, in the ordinary course of their business activities, the Underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of AK Steel and AK Holding or their affiliates. The Underwriters
and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short
positions in such securities and instruments.