Cleveland-Cliffs Calls for Full Redemption of All Senior Notes Due 2020
September 04 2018 - 6:30AM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the “Company”)
announced today that it intends to redeem the entirety of its
outstanding 5.90% senior notes due March 2020 (CUSIP No. 18683K
AA9) and 4.80% senior notes due October 2020 (CUSIP No. 18683K AB7)
(collectively, the “Notes”). The aggregate principal amount
outstanding of the Notes is approximately $211 million. Pursuant to
the terms of the Notes and the Indenture governing the Notes, the
Company expects total payment to holders of the Notes to be
approximately $220 million in aggregate, including make-whole
premiums and accrued and unpaid interest to the redemption date,
which is expected to be no later than October 8, 2018. The Notes
will be repaid with cash on hand.
Lourenco Goncalves, Cliffs' Chairman, President and Chief
Executive Officer said, “We are pleased to announce our decision to
go ahead and use $220 million of our cash on hand to redeem both
tranches of unsecured notes maturing in 2020. Given the on-time and
on-budget progress of our HBI plant construction, together with the
strong free cash flow generation resulting from our
domestically-focused business model, there is no reason to wait any
longer to redeem these Notes.” Mr. Goncalves added, “In addition to
reducing our total debt, this redemption brings us one step closer
to being in a position to return capital to our shareholders.”
A notice of redemption setting forth the redemption procedures
will be provided to registered holders of the Notes by The
Depository Trust Company. Requests for documents relating to the
redemption may be directed to the trustee and paying agent, U.S.
Bank, Global Corporate Trust Services, 111 Filmore Ave. E; St.
Paul, MN 55107; telephone: 1-800-934-6802.
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. 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 StatementsThis 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, reduced market demand and risks
related to U.S. government actions with respect to Section 232 of
the Trade Expansion Act (as amended by the Trade Act of 1974), the
North American Free Trade Agreement and/or other trade agreements,
treaties or policies; 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 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; 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; risks related to former international operations,
including our ability to successfully conclude the CCAA process
in Canada and to close our Asia
Pacific business in a manner that minimizes cash outflows and
associated liabilities, including, among other things, our ability
to successfully complete the sale of the assets of our Asia Pacific
Iron Ore business and our ability to reach negotiated settlements
with other third parties in Australia; 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 maintain appropriate relations with unions and
employees; 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 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; 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;
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; and the potential existence of significant deficiencies or
material weakness 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, 2017. You are urged to carefully
consider these risk factors.
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version on businesswire.com: https://www.businesswire.com/news/home/20180904005198/en/
Cleveland-Cliffs Inc.MEDIA:Patricia Persico,
216-694-5316Director, Corporate
CommunicationsorINVESTORS:Paul Finan, 216-694-6544Director,
Investor Relations
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