United States Steel Corporation Announces Pricing of Private Offering of $300 Million of 5.00% Senior Convertible Notes Due 2...
October 16 2019 - 8:35PM
United States Steel Corporation (NYSE: X) (“U. S. Steel”)
today announced the pricing of an aggregate principal amount of
$300,000,000 5.00% Senior Convertible Notes due 2026 (the “notes”)
in a previously announced private offering made only to persons
reasonably expected to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). In addition, U. S. Steel has granted
the initial purchasers of the notes a 30-day option to purchase up
to an additional $50,000,000 aggregate principal amount of the
notes on the same terms and conditions (the “additional notes”).
The sale of the notes to the initial purchasers is expected to
close on October 21, 2019, subject to customary closing conditions,
and is expected to result in approximately $291 million in net
proceeds to U. S. Steel after deducting the initial
purchasers’ discount and estimated offering expenses payable by
U. S. Steel (or approximately $340 million if the initial
purchasers’ option to purchase additional notes is exercised in
full).
The notes will be general senior unsecured
obligations of U. S. Steel and will accrue interest at a
rate of 5.00% per year, payable semi-annually in arrears on May 1
and November 1 of each year, beginning on May 1, 2020. The notes
will mature on November 1, 2026, unless earlier redeemed,
repurchased or converted. U. S. Steel may not
redeem the notes prior to November 5, 2023. On or after
November 5, 2023 and prior to August 1, 2026, if the price per
share of U. S. Steel’s common stock has been at least
130% of the conversion price for specified periods,
U. S. Steel may redeem all or a portion of the notes at a
cash redemption price of 100% of the principal amount of the notes
to be redeemed, plus accrued and unpaid interest to, but excluding,
the redemption date. Holders of the notes will have the right to
require U. S. Steel to repurchase all or a portion of
their notes upon the occurrence of a fundamental change (as defined
in the indenture governing the notes) at a purchase price of 100%
of their principal amount, plus any accrued and unpaid interest to,
but excluding, the repurchase date.
The conversion rate will initially be 74.8391
shares of common stock per $1,000 principle amount of notes
(equivalent to an initial conversion price of approximately $13.36
per share of common stock and representing a premium of
approximately 27.50% to the last reported sale price of $10.48 per
share of U. S. Steel’s common stock on the NYSE on
October 16, 2019), subject to adjustment in certain circumstances.
In addition, following certain corporate events that occur prior to
the maturity date or U. S. Steel’s delivery of a notice
of redemption, U. S. Steel will increase, in certain
circumstances, the conversion rate for a holder who elects to
convert its notes in connection with such a corporate event or
notice of redemption, as the case may be. Prior to the close
of business on the business day immediately preceding August 1,
2026, holders of notes may convert all or a portion of their notes
at their option only upon the satisfaction of specified conditions
and during certain periods. On or after August 1, 2026, holders may
convert all or a portion of their notes at any time prior to the
close of business on the second scheduled trading day immediately
preceding the maturity date. Upon conversion, U. S. Steel
will satisfy its conversion obligation by paying or delivering, as
applicable, shares of its common stock, cash, shares of common
stock or a combination thereof, at U. S. Steel’s
election.
U. S. Steel intends to use the net
proceeds from the offerings for general corporate purposes,
including, without limitation, for previously announced strategic
investments and capital expenditures.
Neither the notes, nor any shares of common stock
issuable upon conversion of the notes have been registered under
the Securities Act or any state securities laws, and unless so
registered, may not be offered or sold in the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and other applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, including the
notes, the additional notes or U. S. Steel common stock,
nor shall it constitute an offer, solicitation or sale of any
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction.
ABOUT U. S. STEEL
United States Steel Corporation, headquartered
in Pittsburgh, Pa., is a leading integrated steel producer and
Fortune 250 company with major operations in the United States and
Central Europe.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Words such as, but not limited to, "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "could," "may,"
"will," "should," and similar expressions are intended to identify
forward-looking statements. All forward-looking statements rely on
a number of assumptions, estimates and data concerning future
results and events and are subject to a number of uncertainties and
other factors, that could cause actual results to differ materially
from those reflected in such statements. Accordingly,
U. S. Steel cautions that the forward-looking statements
contained herein are qualified by these and other important factors
and uncertainties that could cause results to differ materially
from those reflected by such statements. For more information on
additional potential risk factors, please review
U. S. Steel’s filings with the SEC, including, but not
limited to, U. S. Steel’s Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and its Current Reports on Form
8-K.
CONTACTS: |
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MediaMeghan CoxManagerCorporate CommunicationsT - (412) 433-6777E -
mmcox@uss.com |
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Investors/AnalystsKevin LewisGeneral ManagerInvestor RelationsT -
(412) 433-6935E - klewis@uss.com |
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