Street Calls of the Week
CLEVELAND - Cleveland-Cliffs Inc. (NYSE:CLF) has priced an upsized offering of $850 million in senior unsecured guaranteed notes due 2034, the company announced Wednesday. According to InvestingPro data, the company currently carries a total debt of $7.75 billion, with this new offering aimed at debt restructuring.
The notes will carry an interest rate of 7.625% annually and will be issued at par. They will be guaranteed on a senior unsecured basis by the company’s material direct and indirect wholly-owned domestic subsidiaries, with certain exclusions. The offering is expected to close on September 8. While the company operates with a significant debt burden, InvestingPro analysis shows its liquid assets exceed short-term obligations, with a healthy current ratio of 2.04.
Cleveland-Cliffs plans to use the net proceeds to redeem all of its outstanding 5.875% Senior Guaranteed Notes due 2027, 7.00% Senior Guaranteed Notes due 2027, and AK Steel 7.00% Senior Notes due 2027. The company will also repay borrowings under its asset-based credit facility.
The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act and to non-U.S. persons under Regulation S. They have not been registered under the Securities Act or state securities laws and cannot be offered or sold in the United States without registration or an applicable exemption.
Cleveland-Cliffs is a leading North America-based steel producer specializing in value-added sheet products, particularly for the automotive industry. The company operates with vertical integration from iron ore mining through steel production and downstream finishing. With a market capitalization of $5.12 billion and a beta of 1.99, the stock shows significant market sensitivity. Headquartered in Cleveland, Ohio, it employs approximately 30,000 people across operations in the United States and Canada. For deeper insights into CLF’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.
This report is based on a company press release statement.
In other recent news, Cleveland-Cliffs Inc. has announced its intention to offer $600 million in Senior Unsecured Guaranteed Notes due in 2034. The company plans to use the proceeds from this offering, along with its available liquidity, to redeem several outstanding notes due in 2027. Additionally, Cleveland-Cliffs has secured multiyear fixed-price contracts with multiple U.S. automakers to supply standard sheet steel, marking a change from its usual one-year agreements. In a move to address tariff circumvention, the U.S. Department of Commerce has imposed 50% tariffs on certain steel derivative products, a decision that Cleveland-Cliffs has supported. Meanwhile, Wells Fargo has initiated coverage of Cleveland-Cliffs with an Equal Weight rating, citing a positive near-term view on sheet prices. These developments indicate strategic financial and operational adjustments by Cleveland-Cliffs in response to market conditions.
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