Replies to post #9234 on The Rising Influence of Rising Affluence

[Democritus_of_Abdera]

Re: Will CLF retire bonds with asset sales...

DewDilligence (#msg-108799121)
Alternatively, CLF could simply tender for a portion of the old bonds (without issuing new ones) after completing more asset divestitures.

One of the reasons stated by CLF on Nov 19 for the bond swap was to generate cash (approx. $500M) so that the existing revolving credit facility could be replaced by a new asset-based revolving credit facility.

Consequently, I doubt that cash generated from asset sales will be used to retire bonds until a $500M cash reserve is established and a new revolving credit facility is obtained.

Relevant Quotes from the original Nov 19 tender offer:

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.
…
Specifically, the Company's obligation to accept for purchase, and to pay for, Securities validly tendered pursuant to the Tender Offers is subject to, and conditioned upon, having obtained the New Debt Financing in a minimum aggregate principal amount of $1.1 billion and having replaced our existing revolving credit facility with the New Credit Facility, subsequent to the date hereof and on or prior to the Final Settlement Date, on terms and conditions reasonably satisfactory to the Company (the "Refinancing Condition").

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

[DewDiligence]

I spoke too soon, evidently.