Cleveland Cliffs Inc (CLF)

[sts66]

Wish you were right - unfortunately, it's $8.17 - the good news is CLF has the option of paying the notes off in cash, and interest rate is extremely low - almost appears to me buyers will expect CLF to be trading way above $8 by 2024, because that's pretty much the only way they're going to make money on these notes - interest rate won't even cover inflation, let alone lost opportunity cost:

http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2017/Cleveland-Cliffs-Inc-Announces-Pricing-of-275000000-of-Convertible-Senior-Notes-due-2025/default.aspx

The Convertible Notes will be senior unsecured obligations of Cliffs. The Convertible Notes will bear interest at a rate of 1.5% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes will mature on January 15, 2025, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to July 15, 2024, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date. The initial conversion rate will be 122.4365 common shares, par value $0.125 per share (“Common Shares”), of the Company per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $8.17 per Common Share). The conversion rate will be subject to adjustment in some events but will not be adjusted for accrued and unpaid interest. The Convertible Notes will be convertible into cash, Common Shares or a combination of cash and Common Shares, at Cliffs’ election. Cliffs may not redeem the Convertible Notes except, on or after January 15, 2022, upon the occurrence of certain events and during certain periods. No “sinking fund” is provided for the Convertible Notes.