Replies to post #9145 on The Rising Influence of Rising Affluence

[jbog]

You'll find a little conversation between Cliffs and Reuters on their morning metal page.

http://share.thomsonreuters.com/assets/newsletters/Inside_Metals/IM_Nov_20_2014.pdf

[DewDiligence]

Indeed! I wonder if yesterday’s PR, which seemed deliberately bearish in its wording vis-à-vis the Canadian liabilities, was a deliberate attempt to drive down the market price of CLF’s debt securities.

[Democritus_of_Abdera]

Re: CLF Bond Buyback...

As I read today's PR, CLF was not able to get favorable rates for the $1.1B senior secured debt bond it was planning to use to generate funds for the buy back.

They had no problem in getting current bond holders to tender the old bonds.

see: http://ir.cliffsnaturalresources.com/English/investors/news-releases/news-releases-details/2014/Cliffs-Natural-Resources-Inc-Announces-Termination-with-Respect-to-Tender-Offers-for-Certain-of-Its-Senior-Notes/default.aspx

Relevant quotes:

With the unfavorable move in market rates during the past few weeks, the prudent decision is to postpone the company's refinancing plans until market conditions improve," said Cliffs' Chairman, President and CEO, Lourenco Goncalves.

As of the early tender date and withdrawal deadline for the Tender Offers, which was 5:00 p.m., New York City time, on December 3, 2014, Securities had been validly tendered and not validly withdrawn with an aggregate purchase price in excess of the $600.0 million payment cap.

From the Nov 19 PR: 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

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.