Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it
has priced $750 million aggregate principal amount of senior
unsecured guaranteed notes due 2030 (the “Notes”) in an offering
that is exempt from the registration requirements of the Securities
Act of 1933 (the “Securities Act”). The Notes will bear interest at
an annual rate of 6.75% and will be issued at par. The Notes will
be guaranteed on a senior unsecured basis by the Company’s material
direct and indirect wholly-owned domestic subsidiaries, other than
certain excluded subsidiaries. The offering is expected to close on
April 14, 2023, subject to the satisfaction of customary closing
conditions.
The Company intends to use the net proceeds from the Notes to
repay a portion of the borrowings under the Company’s existing
asset-based revolving credit facility. The transaction is leverage
neutral and interest expense neutral, and extends the Company’s
debt maturity profile. Following the transaction, the Company will
maintain over $2 billion in pre-payable or callable debt that it
expects to continue to reduce with its free cash flow
generation.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities. The 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, 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 Notes and the related guarantees have not been 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.
Cleveland-Cliffs is the largest flat-rolled steel producer in
North America. Founded in 1847 as a mine operator, Cliffs also is
the largest manufacturer of iron ore pellets in North America. The
Company is vertically integrated from mined raw materials, direct
reduced iron, and ferrous scrap to primary steelmaking and
downstream finishing, stamping, tooling, and tubing.
Cleveland-Cliffs is the largest supplier of steel to the automotive
industry in North America and serves a diverse range of other
markets due to its comprehensive offering of flat-rolled steel
products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs
employs approximately 27,000 people across its operations in the
United States and Canada.
Forward-Looking Statements
This release contains statements that constitute
“forward-looking statements” within the meaning of the federal
securities laws. All statements other than historical facts,
including, without limitation, statements regarding our current
expectations, estimates and projections about our industry or our
businesses, are forward-looking statements. We caution investors
that any forward-looking statements are subject to risks and
uncertainties that may cause actual results and future trends to
differ materially from those matters expressed in or implied by
such forward-looking statements. Investors are cautioned not to
place undue reliance on forward-looking statements. Among the risks
and uncertainties that could cause actual results to differ from
those described in forward-looking statements are the following:
continued volatility of steel, iron ore and scrap metal market
prices, which directly and indirectly impact the prices of the
products that we sell to our customers; uncertainties associated
with the highly competitive and cyclical steel industry and our
reliance on the demand for steel from the automotive industry,
which has been experiencing supply chain disruptions, such as the
semiconductor shortage, and higher consumer interest rates, which
could result in lower steel volumes being demanded; potential
weaknesses and uncertainties in global economic conditions, excess
global steelmaking capacity, oversupply of iron ore, prevalence of
steel imports and reduced market demand, including as a result of
inflationary pressures, the COVID-19 pandemic, conflicts or
otherwise; severe financial hardship, bankruptcy, temporary or
permanent shutdowns or operational challenges of one or more of our
major customers, including customers in the automotive market, key
suppliers or contractors, which, among other adverse effects, could
disrupt our operations or lead to reduced demand for our products,
increased difficulty collecting receivables, and customers and/or
suppliers asserting force majeure or other reasons for not
performing their contractual obligations to us; disruptions to our
operations relating to an infectious disease outbreak or the
COVID-19 pandemic, including workforce challenges and the risk that
novel variants will prove resistant to existing vaccines or that
new or continuing lockdowns in China will impact our ability to
source certain critical supplies in a timely and predictable
manner; risks related to U.S. government actions with respect to
Section 232 of the Trade Expansion Act of 1962 (as amended by the
Trade Act of 1974), the United States-Mexico-Canada Agreement
and/or other trade agreements, tariffs, treaties or policies, as
well as the uncertainty of obtaining and maintaining effective
antidumping and countervailing duty orders to counteract the
harmful effects of unfairly traded imports; impacts of existing and
increasing governmental regulation, including potential
environmental regulations relating to climate change and carbon
emissions, and related costs and liabilities, including failure to
receive or maintain required operating and environmental permits,
approvals, modifications or other authorizations of, or from, any
governmental or regulatory authority and costs related to
implementing improvements to ensure compliance with regulatory
changes, including potential financial assurance requirements, and
reclamation and remediation obligations; potential impacts to the
environment or exposure to hazardous substances resulting from our
operations; our ability to maintain adequate liquidity, our level
of indebtedness and the availability of capital could limit our
financial flexibility and cash flow necessary to fund working
capital, planned capital expenditures, acquisitions, and other
general corporate purposes or ongoing needs of our business; our
ability to reduce our indebtedness or return capital to
shareholders within the currently expected timeframes or at all;
adverse changes in credit ratings, interest rates, foreign currency
rates and tax laws, including adverse impacts as a result of the
Inflation Reduction Act of 2022; the outcome of, and costs incurred
in connection with, lawsuits, claims, arbitrations or governmental
proceedings relating to commercial and business disputes, antitrust
claims, environmental matters, government investigations,
occupational or personal injury claims, property damage, labor and
employment matters, or suits involving legacy operations and other
matters; uncertain availability or cost, due to inflation or
otherwise, of critical manufacturing equipment and spare parts;
supply chain disruptions or changes in the cost, quality or
availability of energy sources, including electricity, natural gas
and diesel fuel, or critical raw materials and supplies, including
iron ore, industrial gases, graphite electrodes, scrap metal,
chrome, zinc, coke and metallurgical coal; problems or disruptions
associated with transporting products to our customers, moving
manufacturing inputs or products internally among our facilities,
or suppliers transporting raw materials to us; the risk that the
cost or time to implement a strategic or sustaining capital project
may prove to be greater than originally anticipated; uncertainties
associated with natural or human-caused disasters, adverse weather
conditions, unanticipated geological conditions, critical equipment
failures, infectious disease outbreaks, tailings dam failures and
other unexpected events; cybersecurity incidents relating to,
disruptions in, or failures of, information technology systems that
are managed by us or third parties that host or have access to our
data or systems, including the loss, theft or corruption of
sensitive or essential business or personal information and the
inability to access or control systems; liabilities and costs
arising in connection with any business decisions to temporarily or
indefinitely idle or permanently close an operating facility or
mine, which could adversely impact the carrying value of associated
assets and give rise to impairment charges or closure and
reclamation obligations, as well as uncertainties associated with
restarting any previously idled operating facility or mine; our
level of self-insurance and our ability to obtain sufficient
third-party insurance to adequately cover potential adverse events
and business risks; uncertainties associated with our ability to
meet customers’ and suppliers’ decarbonization goals and reduce our
greenhouse gas emissions in alignment with our own announced
targets; challenges to maintaining our social license to operate
with our stakeholders, including the impacts of our operations on
local communities, reputational impacts of operating in a
carbon-intensive industry that produces greenhouse gas emissions,
and our ability to foster a consistent operational and safety track
record; our actual economic mineral reserves or reductions in
current mineral reserve estimates, and any title defect or loss of
any lease, license, easement or other possessory interest for any
mining property; our ability to maintain satisfactory labor
relations with unions and employees; unanticipated or higher costs
associated with pension and other post-employment benefit
obligations resulting from changes in the value of plan assets or
contribution increases required for unfunded obligations; uncertain
availability or cost of skilled workers to fill critical
operational positions and potential labor shortages caused by
experienced employee attrition or otherwise, as well as our ability
to attract, hire, develop and retain key personnel; the amount and
timing of any repurchases of our common shares; and potential
significant deficiencies or material weaknesses in our internal
control over financial reporting.
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, 2022, and other filings with the
U.S. Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230411005899/en/
MEDIA CONTACT: Patricia Persico Senior Director,
Corporate Communications (216) 694-5316
INVESTOR CONTACT: James Kerr Manager, Investor Relations
(216) 694-7719
Cleveland Cliffs (NYSE:CLF)
Historical Stock Chart
From May 2024 to Jun 2024
Cleveland Cliffs (NYSE:CLF)
Historical Stock Chart
From Jun 2023 to Jun 2024