Replies to post #3185 on Cleveland Cliffs Inc (CLF)

[DewDiligence]

Re: $316M* convertible offering

The interest rate, conversion rate and other terms of the Convertible Notes will be determined at the time of pricing of the Convertible Notes offering.

The conversion rate from notes to common shares will tell us how much existing shareholders are being diluted.

While we wait for that info, the stock is down 7% in AH trading.

*Assuming exercise of 15% underwriter’s option.

[winchem21]

$275M Convertibles initial conversion price $8.17, interest 1.5%

http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2017/Cleveland-Cliffs-Inc-Announces-Pricing-of-275000000-of-Convertible-Senior-Notes-due-2025/default.aspx

December 05, 2017
Download this Press Release (PDF)
CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE:CLF) (“Cliffs” or the “Company”) announced today that it has priced its previously announced registered public offering of $275.0 million aggregate principal amount of its convertible senior notes due 2025 (the “Convertible Notes”) (or up to an aggregate of $316.25 million aggregate principal amount of Convertible Notes if the underwriters exercise their over-allotment option in full). The offering is expected to close on December 19, 2017, subject to satisfaction of customary closing conditions.

The Convertible Notes will be senior unsecured obligations of Cliffs. The Convertible Notes will bear interest at a rate of 1.5% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes will mature on January 15, 2025, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to July 15, 2024, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date. The initial conversion rate will be 122.4365 common shares, par value $0.125 per share (“Common Shares”), of the Company per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $8.17 per Common Share). The conversion rate will be subject to adjustment in some events but will not be adjusted for accrued and unpaid interest. The Convertible Notes will be convertible into cash, Common Shares or a combination of cash and Common Shares, at Cliffs’ election. Cliffs may not redeem the Convertible Notes except, on or after January 15, 2022, upon the occurrence of certain events and during certain periods. No “sinking fund” is provided for the Convertible Notes.

The Company intends to use the net proceeds from the offering of the Convertible Notes, along with the net proceeds from its previously announced concurrent secured notes offering, to finance a substantial portion of its hot briquetted iron (“HBI”) capital project and for general corporate purposes.

The Convertible Notes offering and the concurrent offering of secured notes are not contingent upon one another.