false0000764065 0000764065 2020-04-24
2020-04-24
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934
Date of Report
(Date of earliest event reported): April 24, 2020
CLEVELAND-CLIFFS
INC.
(Exact name of
registrant as specified in its charter)
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Ohio
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1-8944
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34-1464672
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(State or
Other Jurisdiction of Incorporation or Organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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200 Public
Square,
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Suite
3300,
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Cleveland,
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Ohio
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44114-2315
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(Address of
Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (216)
694-5700
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Not
Applicable
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(Former name or
former address, if changed since last report)
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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☐
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Securities registered pursuant
to Section 12(b) of the Act:
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Title of each
class
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Trading Symbol(s)
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Name of each exchange on which
registered:
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Common Shares, par value
$0.125 per share
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CLF
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New York Stock
Exchange
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Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (Section 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (Section 240.12b-2 of this chapter).
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Emerging growth
company
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☐
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If an emerging
growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
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Item
1.01.
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Entry into a
Material Definitive Agreement.
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On April 24, 2020,
Cleveland-Cliffs Inc., an Ohio corporation (the
“Company”),
issued an additional $555,159,000 aggregate principal amount of
9.875% Senior Secured Notes due 2025 (the “Additional
Notes”) in a
private transaction exempt from the registration requirements of
the Securities Act of 1933 (the “Securities
Act”). The
Additional Notes have not been, and will not be, registered under
the Securities Act and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act.
The Additional
Notes are an issuance of the Company’s existing 9.875% Senior
Secured Notes due 2025 and were issued pursuant to the indenture,
dated as of April 17, 2020 (as supplemented, the
“Indenture”),
among the Company, the guarantors party thereto (the
“Guarantors”)
and U.S. Bank National Association, as trustee and first lien notes
collateral agent (the “Trustee”),
pursuant to which the Company previously issued $400,000,000
aggregate principal amount of 9.875% Senior Secured Notes due 2025
(the “Initial
Notes” and,
together with the Additional Notes, the “Notes”).
The Additional Notes will be treated as the same class and series
as, and otherwise identical to, the Initial Notes other than with
respect to the date of issuance and issue price.
The Notes bear
interest at a rate of 9.875% per annum. Interest on the Notes is
payable semi-annually in arrears on April 17 and October 17 of each
year, commencing on October 17, 2020. The Notes mature on October
17, 2025 and are secured senior obligations of the
Company.
The Notes are
jointly and severally and fully and unconditionally guaranteed on a
senior secured basis by substantially all of the Company’s material
domestic subsidiaries and will be secured (subject in each case to
certain exceptions and permitted liens) by (i) a first-priority
lien (pari passu with the Company’s existing secured notes) on
substantially all of the Company’s assets and the assets of the
Guarantors (other than accounts receivable and other rights to
payment, inventory, as-extracted collateral, certain 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 terms of the
Notes are governed by the Indenture. The Indenture contains
customary covenants that, among other things, limit the Company’s
and its subsidiaries’ ability to create certain liens on property
that secure indebtedness, use proceeds of dispositions of
collateral, enter into sale and leaseback transactions, merge or
consolidate with another company, and transfer or sell all or
substantially all of the Company’s assets. Upon the occurrence of a
“change of control triggering event,” as defined in the Indenture,
the Company is required to offer to repurchase the Notes at 101% of
the aggregate principal amount thereof, plus any accrued and unpaid
interest, if any, to, but excluding, the repurchase
date.
The Company may
redeem any of the Notes beginning on October 17, 2022. The initial
redemption price is 107.406% of their principal amount, plus
accrued and unpaid interest, if any, to, but excluding, the
redemption date. The redemption price will decline six months after
October 17, 2022 and each year after April 17, 2023, and will be
100% of their principal amount, plus accrued interest, beginning on
April 17, 2025. The Company may also redeem some or all of the
Notes at any time and from time to time prior to October 17, 2022
at a price equal to 100% of the principal amount thereof plus a
“make-whole” premium, plus accrued and unpaid interest, if any, to,
but excluding, the redemption date.
In addition, until
August 16, 2020, the Company may redeem in the aggregate up to 35%
of the original aggregate principal amount of the Notes (calculated
after giving effect to any issuance of additional notes) with the
net cash proceeds of any loan received pursuant to a debt facility
entered into pursuant to the laws, rules or regulations of the
United States promulgated under the Coronavirus Aid, Relief and
Economic Security Act or any other legislation, regulation, act or
similar law in response to, or related to the effect of COVID-19,
at a redemption price (expressed as a percentage of principal
amount thereof) of 103%, plus accrued and unpaid interest, if any,
to, but excluding, the redemption date (subject to the right of
holders of record on the relevant record date to receive interest
due on the relevant interest payment date), so long as at least 65%
of the original aggregate principal amount of the Notes (calculated
after giving effect to any issuance of additional notes) remain
outstanding after each such redemption.
Lastly, at any time
and from time to time on or prior to October 17, 2022, the Company
may redeem in the aggregate up to 35% of the original aggregate
principal amount of the Notes (calculated after giving effect to
any
issuance of
additional notes) with the net cash proceeds of certain equity
offerings, at a redemption price of 109.875%, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date, so
long as at least 65% of the original aggregate principal amount of
the Notes (calculated after giving effect to any issuance of
additional notes) issued under the Indenture remain outstanding
after each such redemption.
The Indenture
contains customary events of default, including failure to make
required payments, failure to comply with certain agreements or
covenants, failure to pay or acceleration of certain other
indebtedness, certain events of bankruptcy and insolvency, and
failure to pay certain judgments. An event of default under the
Indenture will allow either the Trustee or the holders of at least
25% in aggregate principal amount of the then-outstanding Notes to
accelerate, or in certain cases, will automatically cause the
acceleration of, the amounts due under the Notes.
The Company intends
to use the proceeds from the Additional Notes to repurchase (i)
$77,063,000 aggregate principal amount of the Company’s 5.750%
Senior Notes due 2025, (ii) $20,000,000 aggregate principal amount
of the Company’s 1.500% Convertible Senior Notes due 2025, (iii)
$161,818,000 aggregate principal amount of the Company’s 6.375%
Senior Notes due 2025, (iv) $247,328,000 aggregate principal amount
of the Company’s 7.000% Senior Notes due 2027, (v) $194,465,000
aggregate principal amount of the Company’s 5.875% Senior Notes due
2027 and (vi) $35,721,000 aggregate principal amount of the
Company’s 6.250% Senior Notes due 2040.
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Item
2.03.
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Creation of a
Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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The terms of the
Indenture and the Notes are summarized in Item 1.01 of this Current
Report on Form 8-K and are incorporated into this Item 2.03 by
reference.
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Item
9.01.
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Financial
Statements and Exhibits.
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Exhibit
Number
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Description
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101
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Cover Page Interactive Data
File - the cover page XBRL tags are embedded within the Inline XBRL
document.
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104
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The cover page from this
Current Report on Form 8-K, formatted as Inline XBRL.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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CLEVELAND-CLIFFS
INC.
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Date:
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April 24, 2020
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By:
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/s/ James D.
Graham
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Name:
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James D. Graham
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Title:
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Executive Vice President, Chief
Legal Officer & Secretary
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