Cleveland-Cliffs Announces Proposed Offering of $1,000,000,000 Senior Unsecured Guaranteed Notes
February 09 2021 - 5:52AM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it
intends to offer to sell, subject to market and other conditions,
senior unsecured guaranteed notes to be issued by the Company in
separate series of notes due 2029 and 2031 (together, the “Notes”)
in an offering that is exempt from the registration requirements of
the Securities Act of 1933 (the “Securities Act”). The Notes will
be guaranteed on a senior unsecured basis by the Company’s material
direct and indirect wholly-owned domestic subsidiaries, other than
certain excluded subsidiaries.
The Company intends to use the net proceeds from the offering of
the Notes to (i) redeem all of its outstanding 4.875% Senior
Secured Notes due 2024 and 6.375% Senior Guaranteed Notes due 2025
and certain notes issued by Cleveland-Cliffs Steel Corporation
(f/k/a AK Steel Corporation), including its 7.625% Senior Notes due
2021, 7.50% Senior Notes due 2023 and 6.375% Senior Notes due 2025
and (ii) reduce borrowings under the Company’s existing asset-based
revolving credit facility. This news release does not constitute a
notice of redemption with respect to any of the notes listed
herein.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities. The Notes and
related guarantees are being offered only to qualified
institutional buyers in reliance on the exemption from registration
set forth in Rule 144A under the Securities Act, and outside the
United States to non-U.S. persons in reliance on the exemption from
registration set forth in Regulation S under the Securities Act.
The Notes and the related guarantees have not been registered under
the Securities Act, or the securities laws of any state or other
jurisdiction, and may not be offered or sold in the United States
without registration or an applicable exemption from the Securities
Act and applicable state securities or blue sky laws and foreign
securities laws.
About Cleveland-Cliffs Inc.
Cliffs is the largest flat-rolled steel producer in North
America. Founded in 1847 as a mine operator, we are also the
largest supplier of iron ore pellets in North America. In 2020, we
acquired two major steelmakers, AK Steel and ArcelorMittal USA,
vertically integrating our legacy iron ore business with
quality-focused steel production and emphasis on the automotive end
market. Our fully integrated portfolio includes custom-made pellets
and direct reduced iron; flat-rolled carbon steel, stainless,
electrical, plate, tin and long steel products; as well as carbon
and stainless steel tubing, hot and cold stamping and tooling.
Headquartered in Cleveland, Ohio, we employ approximately 25,000
people across our mining, steel and downstream manufacturing
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 the expected
benefits of the Offering, and 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: the
finalization of our financial statements as of and for the fourth
quarter and year ended December 31, 2020, which may differ from our
expectations and preliminary estimated financial information;
disruptions to our operations relating to the 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 and iron ore 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 lightweighting 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 COVID-19 pandemic; severe financial
hardship, bankruptcy, temporary or permanent shutdowns or
operational challenges, due to the 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 (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
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 cash flow necessary to fund working capital,
planned capital expenditures, acquisitions, and other general
corporate purposes or ongoing needs of our business; adverse
changes in credit ratings, interest rates, foreign currency rates
and tax laws; limitations on our ability to realize some or all of
our deferred tax assets or net operating loss carryforwards; our
ability to realize the anticipated synergies and benefits of our
acquisitions of AK Steel and ArcelorMittal USA and to successfully
integrate the businesses of AK Steel and ArcelorMittal USA into our
existing businesses, including uncertainties associated with
maintaining relationships with customers, vendors and employees;
additional debt we assumed, incurred or issued in connection with
the acquisition of AK Steel and ArcelorMittal USA, as well as
additional debt we incurred in connection with enhancing our
liquidity during the COVID-19 pandemic, may negatively impact our
credit profile and limit our financial flexibility; known and
unknown liabilities we assumed in connection with the acquisition
of AK Steel and ArcelorMittal USA, including significant
environmental, pension and other postretirement benefits (“OPEB”)
obligations; 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; supply chain disruptions or changes in
the cost or quality of energy sources or critical raw materials and
supplies, including iron ore, industrial gases, graphite
electrodes, scrap, chrome, zinc, coke and coal; liabilities and
costs arising in connection with any business decisions to
temporarily idle or permanently close a mine or production
facility, which could adversely impact the carrying value of
associated assets and give rise to impairment charges, as well as
uncertainties associated with restarting any previously idled mine
or production facility; problems or disruptions associated with
transporting products to our customers, moving products internally
among our facilities or suppliers transporting raw materials to us;
uncertainties associated with natural disasters, adverse weather
conditions, unanticipated geological conditions, critical equipment
failures, infectious disease outbreaks, tailings dam failures and
other unexpected events; our level of self-insurance and our
ability to obtain sufficient third-party insurance to adequately
cover potential adverse events and business risks; disruptions in,
or failures of, our information technology systems, including those
related to cybersecurity; our ability to successfully identify and
consummate any strategic investments or development projects,
cost-effectively achieve planned production rates or levels and
diversify our product mix and add new customers; our actual
economic iron ore and coal reserves or reductions in current
mineral estimates, including whether we are able to replace
depleted reserves with additional mineral bodies to support the
long-term viability of our operations; the outcome of any
contractual disputes with our customers, joint venture partners,
lessors, or significant energy, material or service providers, or
any other litigation or arbitration; our ability to maintain our
social license to operate with our stakeholders, including by
fostering a strong reputation and consistent operational and safety
track record; our ability to maintain satisfactory labor relations
with unions and employees; availability of workers to fill critical
operational positions and potential labor shortages caused by the
COVID-19 pandemic, as well as our ability to attract, hire, develop
and retain key personnel, including within the acquired AK Steel
and ArcelorMittal USA businesses; unanticipated or higher costs
associated with pension and OPEB obligations resulting from changes
in the value of plan assets or contribution increases required for
unfunded obligations; and potential significant deficiencies or
material weaknesses 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, 2019, our Quarterly Reports on Form
10-Q for the quarterly periods ended March 31, 2020 and September
30, 2020 and other filings filed with the SEC.
You are urged to carefully consider these risk factors.
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Communications (216) 694-531 INVESTOR CONTACT: Paul Finan
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