Cleveland-Cliffs Inc. Proposes $800 Million Note Offering

Cleveland-Cliffs Inc. Proposes a New Offering of Senior Notes

Cleveland-Cliffs Inc. (NYSE: CLF) has recently announced its intention to offer a significant opportunity in the financial markets. The company plans to sell an aggregate of $800 million in Senior Guaranteed Notes, which are set to mature in 2029, and another $800 million in notes due in 2033. This move is subject to prevailing market conditions and other necessary factors.

Purpose of the Senior Guaranteed Notes

The primary goal behind this financial initiative is to raise capital for the anticipated acquisition of Stelco Holdings Inc. Cleveland-Cliffs expects to utilize the net proceeds from this offering to partially fund the cash payment associated with this strategic acquisition. While the company is optimistic about finalizing the acquisition in the fourth quarter of 2024, it remains clear that this note offering is not contingent on the deal's completion.

Key Details of the Notes

The 2029 Notes and the 2033 Notes will be backed on a senior unsecured basis by Cleveland-Cliffs' key subsidiaries, excluding specific subsidiaries as outlined in their financial obligations. It's essential to note that should the Stelco Acquisition not proceed by the specified date of April 14, 2025—extendable to July 14, 2025—the notes will undergo a special mandatory redemption. This would involve the repayment of 100% of the initial issue price along with interest accrued up to the redemption date.

Investment Legalities and Guidelines

This offering is designed for qualified institutional buyers and is based on exemptions from the formal securities registration requirements under the Securities Act of 1933. For those outside the United States, the offering will similarly adhere to the stipulations under Regulation S. Nevertheless, it is important to emphasize that these notes have not been registered and cannot be offered or sold within the United States unless they comply with applicable exemptions.

About Cleveland-Cliffs Inc.

Cleveland-Cliffs stands as a notable leader within the North American steel production industry, focusing heavily on manufacturing value-added steel plate products tailored primarily for the automotive sector. The company boasts a vertically integrated approach that spans from iron ore pellet mining all the way through to finished steel products including stamping, tooling, and tubing. Operating primarily in the United States and Canada, Cleveland-Cliffs is headquartered in Cleveland and employs around 28,000 individuals across its vast operations.

Business Context and Future Outlook

As Cleveland-Cliffs aims to expand its market presence through strategic acquisitions and partnerships, the proposed offering of senior unsecured guaranteed notes represents a critical step in fostering growth and adaptation within a highly competitive marketplace. The ongoing fluctuations in the steel and raw materials markets remain a significant factor as Cliffs pursues its operational objectives.

Potential Challenges Ahead

Despite its forward momentum, Cleveland-Cliffs is not without challenges. Both internal and external factors, such as market volatility, economic conditions, and competition, pose risks that could impact their performance. Commitments to maintaining efficient operations while navigating global supply chain dynamics are essential for the company's success as it progresses in expanding its influence in the steel industry.

Frequently Asked Questions

What is the purpose of the proposed offering by Cleveland-Cliffs?

The proposed offering aims to raise capital for the acquisition of Stelco Holdings Inc., among other corporate purposes.

What are the maturity dates for the senior guaranteed notes?

The notes are due in 2029 and 2033, with $800 million allocated for each maturity.

Who can participate in this note offering?

This offering is available to qualified institutional buyers, aligning with specific securities regulation exemptions.

What makes Cleveland-Cliffs a key player in the steel industry?

Cleveland-Cliffs is a leading North American steel producer with a focus on value-added products and a fully integrated process from mining to finished steel products.

How does the company plan to utilize the proceeds?

The proceeds will primarily be used to finance a portion of the cash consideration for the acquisition of Stelco Holdings Inc. and support ongoing operations.

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