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Re: DewDiligence post# 8901

Thursday, 11/20/2014 7:47:42 AM

Thursday, November 20, 2014 7:47:42 AM

Post# of 29406
Dew, CLF likes your Debt buyback idea...

#msg-106980244 (DewDiligence Oct 7, 2014)

CLF now has the option to buy back its own debt on the open market at a 19% discount to par. Might be a better idea than a stock buyback.

http://ir.cliffsnaturalresources.com/English/investors/news-releases/news-releases-details/2014/Cliffs-Natural-Resources-Inc-Announces-Tender-Offers-for-Certain-of-Its-Senior-Notes/default.aspx (Nov 19, 2014)

Cliffs Natural Resources Inc. (NYSE: CLF) announced today the commencement of tender offers to purchase (each offer a "Tender Offer" and collectively, the "Tender Offers") for cash, subject to certain terms and conditions, up to the maximum aggregate principal amount of its outstanding 3.95% Senior Notes due 2018 (the "2018 Notes"), 5.90% Senior Notes due 2020 (the "March 2020 Notes"), 4.80% Senior Notes due 2020 (the "October 2020 Notes" and, together with the March 2020 Notes, the "2020 Notes"), 4.875% Senior Notes due 2021 (the "2021 Notes") and 6.25% Senior Notes due 2040 (together with the 2018 Notes, the 2020 Notes and the 2021 Notes, the "Securities") that it can purchase for up to $600.0 million in cash (the "Maximum Payment Amount"), excluding accrued and unpaid interest up to the Settlement Date, at the prices set forth below.
....

The Company currently intends to finance the purchase of Securities tendered in the Tender Offers by issuing at least $1.1 billion in aggregate principal amount of senior secured debt securities that will mature prior to the 2020 Notes (the "New Debt Financing"), but, subject to market conditions and at the Company's sole discretion, the Company may elect to enter into alternative debt financing. In addition to the New Debt Financing, we intend to enter into a new secured asset-based revolving credit facility to replace our existing revolving credit facility with availability of $500.0 million to $550.0 million (the "New Credit Facility") at or prior to the settlement of the Tender Offers. The net proceeds of the New Debt Financing remaining after the purchase of the Securities tendered in the Tender Offers is expected to increase our cash on hand, which together with availability under the New Credit Facility is expected to provide additional liquidity.




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