Cleveland Cliffs Inc (CLF)

[sts66]

How does this make financial sense? I can see why they want to kick the 2021 notes down the can despite the much lower interest rate, but they're only pushing out the 2025 notes by 2 yrs and selling the 2027 notes below par - can't say I've ever seen that before - why the hell would they do that?

CLEVELAND - April 29, 2019 - Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it has priced $750 million aggregate principal amount of Senior Notes due 2027 (the “Notes”) in an offering that is exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). The Notes will bear interest at an annual rate of 5.875 percent and will be issued at a price of 96.125 percent of their principal amount. The Notes will be guaranteed on a senior unsecured basis by the Company’s material direct and indirect wholly-owned domestic subsidiaries. The offering is expected to close on May 13, 2019, subject to customary closing conditions.

The Company intends to use the net proceeds from the offering of the Notes to redeem all of its outstanding 4.875% Senior Notes due 2021, to fund a tender offer for up to $600 million aggregate principal amount of its outstanding 5.75% Senior Guaranteed Notes due 2025, including fees and expenses related to the tender offer, and for other general corporate purposes.