Cleveland-Cliffs Inc. (NYSE: CLF) (the “Company”)
announced today the early results of its previously announced offer
to purchase for cash (the “Tender Offer”) up to $600 million
aggregate principal amount (the “Maximum Amount”) of its
outstanding 5.75% Senior Guaranteed Notes due 2025 (the “Notes”),
subject to the terms and conditions set forth in the Company’s
Offer to Purchase dated April 29, 2019 (the “Offer to Purchase”),
including the Financing Condition, as defined therein. The Company
expects the Financing Condition to be satisfied on May 13,
2019.
According to information received from Global Bondholder
Services Corporation, the Depositary and Information Agent for the
Tender Offer, as of 5:00 p.m., New York City time, on May 10, 2019
(the “Early Tender Date”), $810,553,000 aggregate principal amount
of the Notes had been validly tendered and not withdrawn pursuant
to the Tender Offer. The table below identifies the principal
amount of the Notes validly tendered and not validly withdrawn and
the principal amount the Company has accepted for purchase.
Title of Notes
PrincipalAmountOutstandingPrior to
theTender Offer
PrincipalAmountTendered(1)
PrincipalAmountAccepted
forPurchase
FinalProrationFactor
5.75% Senior GuaranteedNotes due 2025
$1,073,280,000 $810,553,000 $600,000,000 74.055779%
___________(1) As of the Early Tender Date.
Chairman, President, and CEO Lourenco Goncalves said, “We are
very pleased with the result of this entire refinancing
transaction, and particularly with the success of the tender offer
for the 2025 notes. With the early full-retirement of the 2021
notes, the next maturity date is now in 2024, and we no longer have
any maturity dates at all for the next five years. Additionally,
our largest maturity tower in 2025 was nearly cut in half.” Mr.
Goncalves concluded, “At this time I would like to thank our
investors for their participation in this leverage neutral,
extension of maturity liability management transaction. As we
continue to grow our Company and improve our profitability with new
products and new business deals, we also expect to continue to
create opportunities like these to incrementally improve our
balance sheet.”
Holders of Notes that validly tendered on or prior to the Early
Tender Date and whose Notes are accepted for purchase will receive
the “Total Consideration” for the Notes, which is $1,000 per $1,000
principal amount of Notes validly tendered and accepted for
purchase. The Total Consideration includes the early tender premium
for the Notes of $50 per $1,000 principal amount of Notes validly
tendered and accepted for purchase. The Total Consideration plus
accrued and unpaid interest for Notes that have been validly
tendered and not validly withdrawn on or before the Early Tender
Date and accepted for purchase will be paid by the Company promptly
following the Early Tender Date (the “Early Settlement Date”). The
Early Settlement Date is expected to be today, May 13, 2019, the
first business day after the Early Tender Date. In accordance with
the terms of the Tender Offer, the withdrawal deadline was 5:00
p.m., New York City time, on May 10, 2019. As a result, Notes that
have been validly tendered on or prior to the Early Tender Date
cannot be withdrawn, except as may be required by applicable law
(as determined by the Company).
Although the Tender Offer is scheduled to expire at midnight,
New York City time, at the end of the day on May 24, 2019, unless
extended or earlier terminated by the Company, because holders of
Notes subject to the Tender Offer validly tendered and did not
validly withdraw Notes on or before the Early Tender Date in an
amount that exceeds the Maximum Amount, the Company does not expect
to accept for purchase any tenders of Notes after the Early Tender
Date.
The Company will only accept for purchase Notes up to the
Maximum Amount. Because purchasing all of the Notes validly
tendered and not validly withdrawn on or before the Early Tender
Date would cause the Maximum Amount to be exceeded, the amount of
Notes purchased will be prorated in accordance with the final
proration factor set forth in the table above, such that the
Maximum Amount will not be exceeded. As discussed in more detail in
the Offer to Purchase, the Company reserves the right, but is under
no obligation, to increase or decrease the Maximum Amount, at any
time, subject to compliance with applicable law (as determined by
the Company).
The obligation of the Company to accept for purchase and to pay
the Total Consideration and the accrued and unpaid interest on the
Notes pursuant to the Tender Offer is not subject to any minimum
tender condition, but is subject to the satisfaction or waiver of
certain conditions described in the Offer to Purchase. The Tender
Offer may be amended, extended, terminated or withdrawn.
The Company has retained Goldman Sachs & Co. LLC to serve as
Dealer Manager for the Tender Offer. Global Bondholder Services
Corporation has been retained to serve as the Information Agent and
Depositary for the Tender Offer. Questions regarding the Tender
Offer may be directed to Goldman Sachs & Co. LLC. at 200 West
Street, New York, NY 10282, telephone (800) 828-3182
(toll-free), (212) 902-6941 (collect) Attn: Liability Management.
Requests for the Offer to Purchase may be directed to Global
Bondholder Services Corporation at (866) 470-4300 (toll-free) or
(212) 430-3774 (collect for banks and brokers).
The Company is making the Tender Offer only by, and pursuant to,
the terms of the Offer to Purchase. None of the Company, the Dealer
Manager, the Information Agent or the Depositary makes any
recommendation as to whether holders of the Notes should tender or
refrain from tendering their Notes. Holders of the Notes must make
their own decision as to whether to tender Notes and, if so, the
principal amount of the Notes to tender. The Tender Offer is not
being made to holders of the Notes in any jurisdiction in which the
making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In any
jurisdiction in which the securities laws or blue sky laws require
the Tender Offer to be made by a licensed broker or dealer, the
Tender Offer will be deemed to be made on behalf of the Company by
the Dealer Manager or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
This press release does not constitute an offer to purchase
securities or a solicitation of an offer to sell any securities or
an offer to sell or the solicitation of an offer to purchase any
securities nor does it constitute an offer or solicitation in any
jurisdiction in which such offer or solicitation is unlawful.
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.
Forward-Looking Statements
This 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 United States-Mexico-Canada Agreement and/or other
trade agreements, treaties or policies; continued volatility of
iron ore and steel prices and other trends, which may impact the
price-adjustment calculations under our sales contracts; our
ability to successfully diversify our product mix and add new
customers beyond our traditional blast furnace clientele; our
ability to cost-effectively achieve planned production rates or
levels, including at our HBI plant; our ability to successfully
identify and consummate any strategic investments or development
projects, including our HBI 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; our actual economic iron ore reserves or reductions
in current mineral estimates, including whether any mineralized
material qualifies as a reserve; 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; problems or uncertainties with sales volume or mix,
productivity, tons mined, transportation, mine-closure obligations,
environmental liabilities, employee-benefit costs and other risks
of the mining industry; 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; our ability to maintain adequate
liquidity, our level of indebtedness and the availability of
capital could limit cash flow available to fund working capital,
planned capital expenditures, acquisitions and other general
corporate purposes or ongoing needs of our business; our ability to
continue to pay cash dividends, and the amount and timing of any
cash dividends; our ability to maintain appropriate relations with
unions and employees; the ability of our customers, joint venture
partners and third-party service providers to meet their
obligations to us on a timely basis or at all; 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; uncertainties associated with
natural disasters, weather conditions, unanticipated geological
conditions, supply or price of energy, equipment failures and other
unexpected events; adverse changes in interest rates and tax laws;
the potential existence of significant deficiencies or material
weakness in our internal control over financial reporting; and our
ability to satisfy the Financing Condition and successfully
complete the Tender Offer. 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, 2018,
and other filings filed with the SEC, including our Current Reports
on Form 8-K. You are urged to carefully consider these risk
factors.
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version on businesswire.com: https://www.businesswire.com/news/home/20190513005175/en/
MEDIA:Patricia PersicoDirector, Corporate
Communications(216) 694-5316
INVESTOR:Paul FinanDirector, Investor Relations(216)
694-6544
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