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CLEVELAND - Cleveland-Cliffs Inc. (NYSE:CLF), a major North American steel producer with a market capitalization of $5 billion, announced its intention to offer $750 million in Senior Guaranteed Notes due 2031, subject to market conditions. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value metrics. The notes are to be guaranteed by the company’s significant wholly-owned domestic subsidiaries, excluding certain ones.
The company, headquartered in Cleveland, Ohio, stated that the proceeds from the offering would be allocated for general corporate purposes, including the repayment of existing debts under its asset-based credit facility. With total debt of $3.8 billion and a current ratio of 1.85 as reported by InvestingPro, the company maintains a stable liquidity position. The offering will be made to qualified institutional buyers and non-U.S. persons outside the United States, in compliance with specific exemptions from the Securities Act of 1933 registration requirements.
Cleveland-Cliffs is recognized for its vertically integrated operations, which span from mining iron ore to producing steel products, particularly catering to the automotive sector. With annual revenue of nearly $20 billion and a strong free cash flow yield of 11%, the company demonstrates significant operational scale. The company employs around 30,000 people across its facilities in the United States and Canada. Discover more detailed insights and 8 additional ProTips about Cleveland-Cliffs in the comprehensive Pro Research Report, available exclusively on InvestingPro.
The news release emphasized that the notes and related guarantees have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. without registration or an applicable exemption.
The announcement contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from current expectations. These include market volatility, economic conditions, industry competition, regulatory changes, and operational risks.
This financial move is part of Cleveland-Cliffs’ ongoing strategy to manage its capital structure and liquidity. The information provided is based on a press release statement from the company.
In other recent news, Cleveland-Cliffs Inc. has been experiencing a series of noteworthy developments. Analyst Gordon Johnson from GLJ Research upgraded Cleveland-Cliffs’ stock rating from Sell to Buy, setting a price target of $14.27. The upgrade was based on expectations of forthcoming tariffs and typical seasonal strength in the steel sector. In addition, the company disclosed its third-quarter 2024 financial results, revealing an adjusted EBITDA of $124 million due to a dip in steel demand. However, Cleveland-Cliffs anticipates a rise in automotive demand and stable pricing in the first quarter of 2025, along with significant cost savings from improved coal contracts and operational efficiencies.
The company also announced the appointment of Jane M. Cronin to its Board of Directors. Cronin meets the New York Stock Exchange’s director independence standards and is expected to bring new insights to the board’s operations. In addition, the strategic acquisition of Stelco (TSX:STLC) is projected to yield $120 million in cost synergies in the first year and enhance EBITDA margins. These are some of the recent developments that have been taking place at Cleveland-Cliffs.
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