Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it
has instructed the trustee to provide notice of redemption for the
entirety of its remaining $607 million aggregate principal amount
of outstanding 9.875% Senior Secured Notes due October 2025.
Pursuant to the terms of the Notes and the Indenture governing the
Notes, the Company expects the total payment to holders of the
Notes including the redemption premium to be approximately $677
million, plus accrued and unpaid interest, if any, to, but not
including, the redemption date, which is expected to be on April
20, 2022. The Notes will be redeemed with available liquidity. The
cash interest associated with these notes is approximately $60
million per year.
Lourenco Goncalves, Cliffs' Chairman, President and Chief
Executive Officer said, “With expectations for our free cash flow
generation continuing to rise, our top priority for the use of this
cash remains the reduction in debt. This redemption is an important
accomplishment for our deleveraging goals, removing our
highest-coupon and nearest dated major debt tranche that was issued
during the peak of pandemic uncertainty. We will have significantly
lower interest expenses as a result.”
This release is for informational purposes only and is neither
an offer to buy nor a solicitation to sell any of the Notes. The
foregoing does not constitute a notice of redemption under the
Indenture governing the Notes and is qualified in its entirety by
the redemption notice that will be distributed to the holders of
the Notes. A notice of redemption setting forth the redemption
procedures will be provided to registered holders of the Notes by
The Depository Trust Company.
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. We are the
largest supplier of steel to the automotive industry in North
America and serve a diverse range of other markets due to our
comprehensive offering of flat-rolled steel products. Headquartered
in Cleveland, Ohio, Cleveland-Cliffs employs approximately 26,000
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:
disruptions to our operations relating to the ongoing COVID-19
pandemic, including the heightened risk that a significant portion
of our workforce or on-site contractors may suffer illness or
otherwise be unable to perform their ordinary work functions;
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 a trend toward light weighting and
supply chain disruptions, such as the semiconductor shortage, that
could result in lower steel volumes being consumed; 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
the prolonged COVID-19 pandemic; severe financial hardship,
bankruptcy, temporary or permanent shutdowns or operational
challenges, due to the ongoing COVID-19 pandemic or otherwise, of
one or more of our major customers, including customers in the
automotive market, key suppliers or contractors, which, among other
adverse effects, could 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; 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; 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; the outcome of, and costs incurred in
connection with, lawsuits, claims, arbitrations or governmental
proceedings relating to commercial and business disputes,
environmental matters, government investigations, occupational or
personal injury claims, property damage, labor and employment
matters, or suits involving legacy operations and other matters;
supply chain disruptions or changes in the cost or quality 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; 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; disruptions in, or failures of, our information
technology systems, including those related to cybersecurity;
liabilities and costs arising in connection with any business
decisions to temporarily 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 ability to realize the anticipated synergies and benefits of
our recent acquisition transactions and to successfully integrate
the acquired businesses into our existing businesses, including
uncertainties associated with maintaining relationships with
customers, vendors and employees and known and unknown liabilities
we assumed in connection with the acquisitions; our level of
self-insurance and our ability to obtain sufficient third-party
insurance to adequately cover potential adverse events and business
risks; 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 ability to successfully identify and consummate any
strategic capital investments or development projects,
cost-effectively achieve planned production rates or levels, and
diversify our product mix and add new customers; 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;
availability of workers to fill critical operational positions and
potential labor shortages caused by the ongoing COVID-19 pandemic,
as well as our ability to attract, hire, develop and retain key
personnel; our ability to maintain satisfactory labor relations
with unions and employees; unanticipated or higher costs associated
with pension and other postretirement benefit obligations resulting
from changes in the value of plan assets or contribution increases
required for unfunded obligations; 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. The Company undertakes no obligation to
publicly update forward-looking statements, whether as a result of
more information, future events or otherwise.
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, 2021, and other filings with the
U.S. Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220321005354/en/
MEDIA CONTACT: Patricia Persico Senior Director,
Corporate Communications (216) 694-5316
INVESTOR CONTACT: James Kerr Manager, Investor Relations
(216) 694-7719
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