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Cleveland-Cliffs to redeem 4 7/8% notes, fund tender via new notes
By Sarah Lizee
Olympia, Wash., April 30 – Cleveland-Cliffs Inc. plans to redeem all of its outstanding 4 7/8% senior notes due 2021 and fund the $600 million tender offer for its 5¾% senior guaranteed notes due 2025 using proceeds from a new offering of notes, according to a press release.
The company announced Tuesday that it priced $750 million of 5 7/8% senior notes due 2027 at 96.125.
Proceeds from the offering will also be used for general corporate purposes.
As previously reported, Cleveland-Cliffs announced Monday that it began a cash tender offer to purchase up to $600 million of its $1,073,280,000 outstanding 5¾% notes.
The tender offer is scheduled to expire at 5 p.m. ET on May 10.
Holders who tender their notes by 5 p.m. ET on May 10, the early tender date, will be eligible to receive the total consideration of $1,000 per $1,000 principal amount. The total consideration includes an early tender payment of $50 per $1,000 principal amount.
Holders tendering after the early tender date will only be eligible to receive the tender offer consideration of $950 per $1,000 principal amount, or the total consideration less the early tender payment.
The company will also pay accrued interest to but excluding the settlement date.
Early tenders are expected to settle on May 13, and the final settlement date is expected to be May 29.
If the amount of notes tendered exceeds the offer cap, the amount of notes accepted for purchase will be prorated.
The tender offer is not conditioned on any minimum amount being tendered but is subject to a financing condition.
Goldman Sachs & Co. LLC (800 828-3182, 212 902-6941, attn.: liability management) is dealer manager for the tender offer. Global Bondholder Services Corp. (866 470-4300 or 212 430-3774 for banks and brokers) is the information agent and depositary.
The issuer is a Cleveland-based iron ore mining company.
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