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No surprise if CLF retires 4% of stock this quarter as it did during the first three months of the year. They certainly have the cash and cash flow to do this. What other company is buying back its stock at a 4%/qtr rate?
Nashwauk rumblings. Essar throws MN curve; gets slammed.
Essar hired former legislator who shows up at news station to announce Essar Nashwauk partnership
Update About Essar's Efforts in Nashwauk
https://www.wdio.com/TWIM/essar-nashwauk-mesabi-metallics-mining-/5378967/
Local columnist pessimistically discusses this breaking news:
Mesabi Metallics claims new partners to restart former Essar iron ore project - Minnesota Brown
http://minnesotabrown.com/2019/06/mesabi-metallics-claims-new-partners-restart-former-essar-iron-ore-project.html
MN DNR issues statement very next day clearly outlining their view of Nashwauk reality
DNR's Full Statement on Nashwauk Mining Project.
https://www.wdio.com/TWIM/dnrs-full-statement-on-nashwauk-mining-project/5380453/
$4 billion EV & $1 billion EBITDA in 2 years is prime real estate for private equity investment. I also wouldn't be surprised to see Berkshire make a play.
CFO! What does he know???
In 1897 Bayer chemist Felix Hoffmann acetylated salicylic acid (SA) to make aspirin as his father and many other complained of the bitter taste and side effects of SA to treat arthritis.
The dried latex from poppy plants is 10% morphine. That same year Hoffman also acetylated morphine in two places to form a substance which Bayer trademarked as "heroin" (German for heroic/strong) since it was more than twice as potent as morphine.
Bayer marked heroin as a cough suppressant for a number of years.
Acetylation involves the attached of an acetyl -C(=O)CH3 group to the oxygen of an hydroxyl (-OH) functional group and can be done with acetic acid or acetic anhydride. There is one hydroxyl group in SA and two hydroxyl groups in morphine as can be seen in the structures below.
Salicylic Acid
Aspirin
Morphine
Heroin
Factoid, Bayer invented heroine the same year they invented aspirin.
Empire permit application filed, request for public comment issued April 22 by Michigan DEQ.
Empire Mine pic.twitter.com/ZtHqaSetI3
— JHansen (@JeremyHansen98) May 17, 2019
I don't think the Empire is connected to the refinancing
CLF will reopen Empire as soon as they get a locked-in contract for the ore and pellets. They can pay $200 million a year for three years out of operating cash flow as HBI will be mostly paid off this year. With a 12-13 year life expectancy for Empire, a $40 margin, and ~3.3 Mtons per year, overall net gross would be ~$1.6 billion on a $600 million investment. LG does not want to spend this amount of capital without a guaranteed source of revenue, especially given the other capital allocation alternatives he has. Empire is being pursued to grow overall revenue for the company and keep the BF customers business by replacing ore being diverted to HBI with Empire ore.
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Three strategic possibilities for the refinancing:
1. With CLF's current bargain valuation and expected EBITDA growth over the next couple of years; I would not be surprised to see CLF taken private or acquired in the near future. CLF just made the decision not to pay off the 2021 bonds as they were previously planning to do and moved $600 M 2025 debt out another two years and the 2021 bonds out six years. Would this refinancing make it easier to take the company private from a potential buyer perspective? They keep pulling shares off the market which seems to be further lowering their market cap as SP is remaining fairly flat. Enterprise value is just over $4 billion now and EBITDA will rise to $1 billion in 2-3 years, that is a very low ratio.
2. If CLF goes full steam ahead at Nashwauk, it will take a great deal of capital to build mine, HBI plant and pellet plant as LG has stated they would do. If they go it alone on all three, perhaps another $2 billion or more? The greatest long-term growth potential in CLF's ore business segment is mining Nashwauk. MN is starting to move things around and CLF just dropped its lawsuit against the state. Hibbing runs out of ore in five years and it will require significant capital to replace this source. Something needs to happen well before 2027 to address this.
3. A third possibility would be CLF acquiring another company, especially with the bargain prices rampart across the industry. More importantly, if Nashwauk does not pan out, CLF will have to pivot and find a way to grow the company.
It is clear that there were specific strategic reasons to bring in the new CFO.
CLF bought back 3.9% (11.5 million shares) of their outstanding stock in Q1. They have both the cash and the cash flow to continue doing this for the foreseeable future if the SP remains so ridiculously low and if they wanted to. LG stated this is a higher priority than even doing an HBI 2 since the IRR of buybacks is so high right now.
Reasonable target since HBI plant should be near full production by the middle of 2021, assuming performance certification testing is complete by the end of 2020. Current SP does not appear to account for HBI production which should add ~$1 per share of annual earnings. Anything higher than low to mid-20s will likely need favorable outcome at Nashwauk.
CLF Announces New Chief Financial Officer Keith A. Koci
Buckle Up Shareholders!!
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2019/Cleveland-Cliffs-Inc-Announces-New-Chief-Financial-Officer/default.aspx
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) announced today that Keith A. Koci has been appointed Executive Vice President, Chief Financial Officer of the company, effective immediately. Mr. Koci replaces Timothy K. Flanagan, who will be leaving the company, effective immediately.
Mr. Koci joins Cliffs from Metals USA Holdings Corp., where he served most recently as its Senior Vice President and Chief Financial Officer. Prior to that role, Mr. Koci served as Metals USA’s Senior Vice President, Business Development from 2006 to 2013; its Vice President, Corporate Controller from 2004 to 2005; its Director of Budgeting from 2003 to 2004; and its Regional Controller of the Flat Rolled Group from 1998 to 2003.
Regarding the departure of Mr. Flanagan and the appointment of Mr. Koci, Cleveland-Cliffs’ Chairman, President and Chief Executive Officer, Lourenco Goncalves, stated: “I appreciate the work done by Tim Flanagan during the last several years with Cleveland-Cliffs. We accomplished many great things with Tim serving as an important part of the team, and I wish him the very best in his future endeavors. I am also very pleased that Keith Koci will relocate to Cleveland and, once again, work side-by-side with me. Keith was instrumental to me at Metals USA, through listing the company’s stock on the Nasdaq in 2003, taking it private in 2005, then IPO’ing it in 2010, and finally selling it to a strategic buyer in 2013. Additionally, during the ten-year period we worked together at Metals USA, Keith was my key player in the execution of several strategic acquisitions, each one with a different level of financial complexity.” Mr. Goncalves concluded: “I believe Keith Koci is, at this time, the right person to lead Cleveland-Cliffs’ Finance Department.”
CLF's price assigns no value for HBI.
Their mining and pelleting operations have an $800 million sustainable gross margin (20 M tons, $40/T margin) and net ~$500 million annually ($100M Interest, $100M SGA, $100M Sustain CapEx & Misc Expenses). WIth a PE of 8 this part of the business has a $4 billion value ($13-14 per share).
Their HBI operation should net ~$300 million annually starting in 2021 with the recent expanded production design. A PE of 12 with this growling line values this part of the business at $3.6 billion (~$12 per share). The world has been moving to DR iron for quite some time.
Overall CLF has a $7.5-8 billion capitalization value ($25-30 per share) assuming no further growth.But they will be growing.
The increase in ore prices for the next couple of years and tax refunds are providing most of the capital to re-open Empire whose production will replace the BF pellets no longer being made at Northshore with their 2019 conversion to DR-grade pellets for HBI production. Empire will further expand pellet production by another 3-3.5 M tons annually (15-17%).
If they build a second HBI, the profits from the Toledo HBI alone will be sufficient to fund all the CapEx for this. A second HBI would add several more billion ($10-12 per share) to overall company value.
Their long-term goal is to build a mine at Nashwauk to replace Hibbing which only has several years of ore left. LG has also stated plans to build HBI and then pellet plants there once the mine is open. This will require a good deal of CapEx and would not be surprised to see them partner there as they are doing at Hibbing now. Alternatively, by then, they may be so flush with cash that there would be no need to partner.
There is also an adult in charge of the company who knows what he is doing and who is aggressively moving to grow the company. Their allocation of capital has been truly superb with investments in growth, addition of a reasonable dividend, buyback at reasonable levels to not compromise investment, and continued retirement of outstanding debt.
CLF is still at firesale prices. As LG has noted, this is a simple business and these facts are all well known. Hard to believe this has being missed by so many analysts for so long. There is imminent risk of buyout and of being taken private at these levels.
CLF paid $0.05 dividend yesterday ~$15M cash
Essar back in Nashwauk picture after paying debt.
Can’t wait to hear LG’s take on this saga..
http://www.startribune.com/essar-back-in-the-picture-at-2-billion-nashwauk-mining-and-processing-facility-project/504068912/
Essar Global in India is back in the financial picture at the controversial $2 billion iron ore mine and processing project in Nashwauk after paying off mountains of debt.
The turn of events on Monday that brought the troubled Essar Global back into the picture caught Minnesota state and Iron Range officials by surprise.
Essar said in a statement on Tuesday that it had paid off Mesabi Metallic’s $260 million in debt. That deal was just one of several complicated debt transactions around the world that were collectively worth about $1.7 billion, officials said. The debt repayments were financed in part with proceeds from the sale of a large coal business.
Essar Global was the parent company of Essar Steel Minnesota, which filed for bankruptcy in 2016 after a decade of delays and problems with financing the Nashwauk project. In 2016, the state took the unusual step of asking Essar Steel to pay back its economic-development loans because the company and its parent firm missed so many project milestones and owed thousands of dollars to local contractors.
At the time, angry state officials said they looked forward to dealing with new owners of the project, owners who would honor their commitments.
Fast forward two years, however, and Essar Global is back.
Essar Global officials said in a statement that the group had “purchased [the] $260 million face value notes issued by Mesabi Metallics Inc. These notes substantially constitute all of the debt of Mesabi, and paves the way for Essar Global to once again participate in the low-cost iron ore mining and pellet manufacturing project that is under construction in Minnesota, USA.”
State officials said they are waiting for more information and had more questions than answers.
“We are seeing the same reporting this afternoon that you are,” said Barbara Naramore, the assistant commissioner of the Department of Natural Resources (DNR) who has been spearheading the Nashwauk project.
“What this [Essar debt repayment] might mean for the resolution of remaining bankruptcy matters and for investment in the Nashwauk project remains to be seen,” she said. “The state mineral leases and the DNR [mining] permits are currently held by Mesabi Metallics and/or Chippewa Capital Partners. Any modifications to the leases or permits would need to be approved by the DNR. And we have received no such requests involving Essar Global.”
Mesabi Metallics spokesman Darin Broton was unsure how the Essar deal would play out. He said Mesabi Metallics would still control and operate the project and own a “considerable chunk” of the entity. “Mesabi still owns all the assets,” he said.
The financial move by Essar Global is the latest in a continuing shift in partners on the project.
First a California investment firm named SPL Advisors took control of the project in late 2016 and changed the company name to Mesabi Metallics. Soon after, Virginia entrepreneur Tom Clarke and his Chippewa Capital Partners bought the Essar Steel assets out of bankruptcy. Clarke then sold a majority share of the company to Nubai Global Management, a firm in the British Virgin Islands, but stayed on to carry out management duties.
By late last summer, Clarke was pushed out and a series of lawsuits were hurled between Clarke and Nubai.
In September, Nubai and Mesabi officials met with former Gov. Mark Dayton and assured him that they would finish the project.
Shortly after the meeting, Nubai and Mesabi introduced a new wrinkle: Swiss trading firm Mercuria Energy would buy a majority stake in the Nashwauk project by the end of 2018. Although Mercuria had ties to Essar Global, it assured Dayton that Essar would not be one of its partners in the Iron Range project.
However, Mercuria said at the time that Essar still had financial obligations tied to the bankruptcy.
Apple's China problem centers on WeChat as the phone interface for all daily interactions. Since the WeChat interface is similar for iOS and Android, Apple's China moat is partially dissolving as a result. Apple still represents a status symbol. China is the only country that this is true for.
Ben Thompson wrote this a while back and just reposted the link noting this underlying issue
https://stratechery.com/2017/apples-china-problem/
The lower SP is allowing CLF to buy back a greater number of shares with their $200 million stated authorization and will help lessen the dilution that they have used multiple times over the past several years. Would really be nice to see a 20-30% reduction in outstanding shares before earnings begin to rocket with HBI sales and higher pellet prices.
Significantly, some of the bond prices are ~10% lower and would also allow CLF to buy back some of the 2024/2025 debt at a discount as cash from continuing operations is generated.
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"Stepped up basis for heirs and untaxed return of capital prove the model"
For those looking to live off of investment income during retirement and planning to preserve portfolio assets for future generations, part of every portfolio should have some of this!
Wise investment! NGL profit potential is not yet appreciated nor is their move to stop using share issuance to fund CapEx. Strong strategic and opportunistic leadership and wonderful support from the Duncan family
Keeping EPD in taxable accounts. Apparently there are complications such as UBTI with putting MLPs in IRAs.
Nice GS environmental angle to attract pension $
Goes ex div next week...
Also CLF has $110M 2019 tax refund & no APIO losses to fund
Dividend will cost ~$60M/year.
-Recent 2020 debt payoffs cut interest by $10M
-Pending 2021 payoff pf the 4.875% $124.2 M would add another ~$6M annual interest savings
-Another $25M freed up from decrease in HBI investment in 2018, does not appear to affect '19 needs
For 2019, the dividend will only require $20M in addition to these other savings.
This appears to be a conservative move, one unlikely to seriously affect HBI investment needs or to threaten capability to make a major Nashwauk move (which is coming..).
quarterly cash dividend on the Company's common shares of $0.05 per share. This equates to $0.20 per year on an annualized basis. The cash dividend will be payable on January 15, 2019, to shareholders of record as of the close of business on January 4, 2019. Cliffs expects to pay the dividend on a quarterly basis, subject to the approval of its Board of Directors.
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2018/Cleveland-Cliffs-Inc-Reports-Third-Quarter-2018-Results-and-Initiates-Quarterly-Cash-Dividend/default.aspx
Goncalves said the investment in Northshore to make more DR grade pellets is nearly ready to be tied in. Means new and old equipment will be connected. #mining pic.twitter.com/CnTqxvSX2J
— Renee Passal (@ReneePassal) September 14, 2018
Goncalves said in Nashwauk, in a perfect world, first the plan is mining, then HBI plant, and finally pellet plant. Said he will take care of Hibbing Taconite, and said he looks @steelworkers as partners, not enemies. #mining pic.twitter.com/X9FRpox6Ro
— Renee Passal (@ReneePassal) September 14, 2018
Cleveland-Cliffs to resign as Hibbing Taconite mine manager, August 1, 2019.
https://www.wdio.com/TWIM/cleveland-cliffs-hibbing-taconite-mine-manager/5029496/
Updated: August 13, 2018 09:37 PM
A big change is coming to the management of Hibbing Taconite. Cleveland-Cliffs has notified its partners that it intends to resign as mine manager, August 1, 2019.
ArcelorMittal owns 62% of the mine, U.S. Steel has 15%, and Cliffs owns 23%.
Cliffs' spokeswoman, Pat Persico said, "Right now, it's business as usual for the employees. The new mine manager will be determined by the joint venture."
She added that the announcement doesn't change the partnership, and that Cliffs will continue to take its share of iron ore pellet production at HibTac.
Cliffs has been the manager at HibTac since 1974. The company also owns and operates Northshore Mining and United Taconite.
Hibbing Taconite is facing the challenge of having a limited mine life, which means they don't have an unlimited source to mine.
They should have never issued bonds and are going to need to revamp their manufacturing process to lessen automation if they are to be viable...
Speaking of Ford, $F is another great buy right now with a yield of 6.8%, payout ratio well under 50%, steady profits, outstanding products and new ones being released over the next two years..
FYI, I have bought shares at $26, at $1.61, and at many points in between. Currently holding largest number of shares ever; have no short-term price expectations.
Sizable bet, small enough to withstand disaster, large enough to be meaningful. CEO is key factor for CLF; he is the real deal and very heavily invested.
EPD is still increasing the dividend by $0.01 annually from the $0.02 increase previously done as a small part of their plan to not issue equity to fund growth. Over time this change will become more significant.
Barron’s: MLPs Were Big Losers in 2017. Tax-Law Changes Could Help Make Them Winners.
http://www.barrons.com/articles/mlps-were-big-losers-in-2017-tax-law-changes-could-help-make-them-winners-1514396007
With the passage of the tax bill, corporations will see a lower tax rate, which for many translates into higher earnings, although there's plenty of calculating to be done as analysts adjust their estimates. But there's one group that may be an undisputed winner: Master Limited Partnerships.
BMO Capital Markets' Danilo Juvane and Earl Lee take a look at what the tax bill means for MLPs on Wednesday, calling it a tailwind into 2018.
They write that although the tax bill lowered the corporate tax rate to 21% from 35% previously, that really doesn't have any effect on existing MLPs, but it does provide less incentive for new companies and IPOs to use the MLP structure. That said, the new rules are still good for MLP investors because they'll owe Uncle Sam less. From the note:
More importantly, under the new law, taxable income for MLP investors is now allowed a 20% deduction, which when coupled with a lowered maximum individual tax rate of 37% vs. 39.6% prior results in a tax liability for MLP investors of approximately ~$30 vs.~$40 on $100 of taxable income. In short, we see the new tax regime as a net positive for MLP investors.
Barron's named MLPs as the best yield-oriented investment for 2018, arguing that despite a tough year for the group, with the Alerian MLP ETF (AMLP) down 14% year to date, there are still pockets of opportunity. Andrew Bary recommended Energy Transfer Partners (ETP) on Dec. 2.
MLP's will also benefit from tax bill's pass-through provision. Texas Sen. John Cornyn had a late amendment added in the bill to include MLPs in the 20% pass-through.
MLP distributions are typically 80% return of capital and 20% income. Holders of MLPs for 15-20 years will eventually have a cost basis of 0, with proceeds from subsequent sales all going into taxable income. This new provision limits the tax rate fo 29.6% for top bracket investors and makes MLPs more attractive long-term investments.
MLPs offer high yield tax deferred distributions. Right now MLP prices are dirt cheap with quality MLPs such as Enterprise Product Partners (EPD) issuing distributions of 6.5%.
LG sold ~$2 million of CLF Dec 15, nearly 10% of his holdings
http://d18rn0p25nwr6d.cloudfront.net/CIK-0000764065/e827b1ba-5742-4a38-99dd-68aa8a85cc02.pdf
$275M Convertibles initial conversion price $8.17, interest 1.5%
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
December 05, 2017
Download this Press Release (PDF)
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE:CLF) (“Cliffs” or the “Company”) announced today that it has priced its previously announced registered public offering of $275.0 million aggregate principal amount of its convertible senior notes due 2025 (the “Convertible Notes”) (or up to an aggregate of $316.25 million aggregate principal amount of Convertible Notes if the underwriters exercise their over-allotment option in full). The offering is expected to close on December 19, 2017, subject to satisfaction of customary closing conditions.
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.
The Company intends to use the net proceeds from the offering of the Convertible Notes, along with the net proceeds from its previously announced concurrent secured notes offering, to finance a substantial portion of its hot briquetted iron (“HBI”) capital project and for general corporate purposes.
The Convertible Notes offering and the concurrent offering of secured notes are not contingent upon one another.
$400 million Secured Notes will bear interest at an annual rate of 4.875% and will be issued at a price of 99.347% of their principal amount. The offering is expected to close on December 19, 2017
Why is CLF moving so quickly on HBI funding that doesn’t ramp up until the latter half of 2018 according to last CC?
1. New tax law
2. Impending higher interest rates
3. Cleaner to go it alone for future M&A
4. Other...
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2017/Cleveland-Cliffs-Inc-Announces-Pricing-of-400000000-of-Senior-Secured-Notes-due-2024/default.aspx
December 05, 2017
Download this Press Release (PDF)
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the “Company”) announced today that it has priced its previously announced private offering of $400.0 million aggregate principal amount of its senior secured notes due 2024 (the “Secured Notes”). The Secured Notes will bear interest at an annual rate of 4.875% and will be issued at a price of 99.347% of their principal amount. The offering is expected to close on December 19, 2017, subject to satisfaction of customary closing conditions.
The Secured Notes will be jointly and severally and fully and unconditionally guaranteed on a senior secured basis by substantially all of Cliffs’ material domestic subsidiaries and will be secured (subject in each case to certain exceptions and permitted liens) by (i) a first-priority lien on substantially all of Cliffs’ assets and the assets of the guarantors (other than accounts receivable and other rights to payment, inventory, as-extracted collateral, investment property, certain general intangibles and commercial tort claims, certain mobile equipment, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds and products of each of the foregoing (collectively, the “ABL Collateral”)), and (ii) a second-priority lien on the ABL Collateral, which is junior to a first-priority lien for the benefit of the lenders under the Company’s senior secured asset-based credit facility.
The Company intends to use the net proceeds from the offering of the Secured Notes, along with the net proceeds from its previously announced concurrent convertible notes offering, to finance a substantial portion of its hot briquetted iron (“HBI”) capital project and for general corporate purposes.
The Secured Notes offering and the concurrent offering of convertible notes are not contingent upon one another.
Also, Nov 24 article noting Clarke’s ERP’s old Magneton MN plant tailings startup has just been delayed by at least 12 months due to PAS controls needed at IN plant that will produce Fe pellets from these tailings..
http://m.startribune.com/rebirth-plans-for-old-magnetation-site-put-on-hold/459817523/
"We didn't know there was a nonfunctioning air pollution system there," he said, adding that the complication "probably pushes [the Grand Rapids plant restart] out 12 months."
Cleveland-Cliffs Inc. Announces Proposed Offering of $400,000,000 of Senior Secured Notes due 2024
No surprise that CLF is lining up HBI funding to go it alone if necessary as they have earlier indicated.
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2017/Cleveland-Cliffs-Inc-Announces-Proposed-Offering-of-400000000-of-Senior-Secured-Notes-due-2024/default.aspx
December 04, 2017
Download this Press Release (PDF)
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the “Company”) announced today that it intends to offer to sell, subject to market and other conditions, $400.0 million aggregate principal amount of its senior secured notes due 2024 (the “Secured Notes”) in an offering that is exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”).
The Secured Notes will be jointly and severally and fully and unconditionally guaranteed on a senior secured basis by substantially all of Cliffs’ material domestic subsidiaries and will be secured (subject in each case to certain exceptions and permitted liens) by (i) a first-priority lien on substantially all of Cliffs’ assets and the assets of the guarantors (other than accounts receivable and other rights to payment, inventory, as-extracted collateral, investment property, certain general intangibles and commercial tort claims, certain mobile equipment, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds and products of each of the foregoing (collectively, the “ABL Collateral”)), and (ii) a second-priority lien on the ABL Collateral, which is junior to a first-priority lien for the benefit of the lenders under the Company’s senior secured asset-based credit facility.
The Company intends to use the net proceeds from the offering of the Secured Notes, along with the net proceeds from its concurrent convertible notes offering, to finance a substantial portion of its hot briquetted iron (“HBI”) capital project and for general corporate purposes. The Secured Notes offering and the concurrent offering of convertible notes are not contingent upon one another.
This news release does not constitute an offer to purchase securities or a solicitation of an offer to sell any securities or an offer to sell or the solicitation of an offer to purchase any securities, nor does it constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is unlawful. The Secured Notes and related guarantees are being offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The Secured Notes and the related guarantees have not been, and will not be, registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.
Cleveland-Cliffs Inc. Announces Proposed Offering of $275,000,000 of Convertible Senior Notes due 2025
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2017/Cleveland-Cliffs-Inc-Announces-Proposed-Offering-of-275000000-of-Convertible-Senior-Notes-due-2025/default.aspx
December 04, 2017
Download this Press Release (PDF)
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the “Company”) announced today that it intends to offer to sell, subject to market and other conditions, $275.0 million aggregate principal amount of its convertible senior notes due 2025 (the “Convertible Notes”) (or up to an aggregate of $316.25 million aggregate principal amount of Convertible Notes if the underwriters exercise their over-allotment option in full) in a registered public offering. The Convertible Notes are expected to mature on January 15, 2025, unless earlier repurchased, redeemed or converted. The Convertible Notes will be convertible at the option of the holders in certain circumstances and during certain periods into cash, common shares or a combination thereof, at the Company’s election. The interest rate, conversion rate and other terms of the Convertible Notes will be determined at the time of pricing of the Convertible Notes offering.
The Company intends to use the net proceeds from the offering of the Convertible Notes, along with the net proceeds from its concurrent secured notes offering, to finance a substantial portion of its hot briquetted iron (“HBI”) capital project and for general corporate purposes.
The Convertible Notes offering and the concurrent offering of secured notes are not contingent upon one another.
BofA Merrill Lynch, Goldman Sachs & Co. LLC, Credit Suisse, Deutsche Bank Securities and Jefferies are acting as joint book-running managers for the Convertible Notes offering.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission (the "SEC") and is effective. The Convertible Notes offering will be made only by means of a prospectus supplement and an accompanying prospectus. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the Convertible Notes offering may be obtained for free by visiting the SEC's website at www.sec.gov. Alternatively, copies may be obtained by contacting BofA Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC 28255-0001, Attn: Prospectus Department, Email: dg.prospectus_requests@baml.com or Goldman Sachs & Co. LLC at 200 West Street, New York, NY 10282, Attention: Prospectus Department, via telephone at (866) 471-2526, or by emailing prospectusgroup-ny@ny.email.gs.com.
This news release does not constitute an offer to purchase securities or a solicitation of an offer to sell any securities or an offer to sell or the solicitation of an offer to purchase any securities, nor does it constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is unlawful.
About Cleveland-Cliffs Inc.
"I would describe this as a stunning presentation from Mary Barra"
Mary Barra is one of America's top CEOs; strong engineering background, proven track record, exceptionally strong strategic focus.
Enterprise Products Partners' Valuation Is Momentarily Depressed, Yet The Company Has A ~7% Dividend And Is Capable Of Growing At Nearly 9%
https://seekingalpha.com/article/4124414-enterprise-products-partners-valuation-momentarily-depressed-yet-company-7-percent-dividend
Compelling SA article on EPD; 14 Nov rohmer comment and others have compelling insights and provide added color