The Rising Influence of Rising Affluence

[winchem21]

CLF will redeem 2025 9.875% notes ($607 million principal) in April using cash from operations. Combined with convertibles closed in January, CLF will have paid off ~$900 million of long term debt in 2022 by the end of April.

If they chose to do so, CLF could easily end 2022 with total net debt equivalent to what they had prior to the acquisition of AKS, MT, and FPT while ending 2022 with revenues ten times higher than prior to these acquisitions.

https://www.clevelandcliffs.com/news/news-releases/detail/544/cleveland-cliffs-to-fully-redeem-its-9-875-senior-secured

March 21, 2022 7:00am EDT
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it has instructed the trustee to provide notice of redemption for the entirety of its remaining $607 million aggregate principal amount of outstanding 9.875% Senior Secured Notes due October 2025. Pursuant to the terms of the Notes and the Indenture governing the Notes, the Company expects the total payment to holders of the Notes including the redemption premium to be approximately $677 million, plus accrued and unpaid interest, if any, to, but not including, the redemption date, which is expected to be on April 20, 2022. The Notes will be redeemed with available liquidity. The cash interest associated with these notes is approximately $60 million per year.

Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer said, “With expectations for our free cash flow generation continuing to rise, our top priority for the use of this cash remains the reduction in debt. This redemption is an important accomplishment for our deleveraging goals, removing our highest-coupon and nearest dated major debt tranche that was issued during the peak of pandemic uncertainty. We will have significantly lower interest expenses as a result.”