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Replies to post #3208 on Cleveland Cliffs Inc (CLF)
12/06/17 7:33 AM
The Convertible Notes are new securities and there is currently no established market for the Convertible Notes. Accordingly, we cannot assure you as to the development or liquidity of any market for the Convertible Notes. Certain of the underwriters have advised us that they presently intend to make a market in the Convertible Notes. However, they are not obligated to do so, and they may discontinue any market making with respect to the Convertible Notes without notice. We do not intend to apply for a listing of the Convertible Notes on any securities exchange or any automated dealer quotation system.
Holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at their option at any time prior to the close of business on the business day immediately preceding July 15, 2024, only under the following circumstances:
<1> during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), if the last reported sale price of our common shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
<2> during the five-business day period after any five-consecutive trading day period, or the measurement period, in which the “trading price” (as defined under “Description of the Convertible Notes—Conversion Rights—Conversion Upon Satisfaction of Trading Price Condition”) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common shares and the conversion rate on each such trading day;
<3> if we call the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
<4> upon the occurrence of specified corporate events described under “Description of the Convertible Notes—Conversion Rights—Conversion Upon Specified Corporate Events.”
On or after July 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.
The conversion rate for the Convertible Notes is initially common shares per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $ per common share), subject to adjustment as described in this prospectus supplement.
Upon conversion, we will pay or deliver, as the case may be, cash, common shares or a combination of cash and common shares, at our election. If we satisfy our conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and common shares, the amount of cash and common shares, if any, due upon conversion will be based on a daily conversion value (as described herein) calculated on a proportionate basis for each trading day in a 25-trading day observation period (as described herein). See “Description of the Convertible Notes—Conversion Rights—Settlement Upon Conversion.”
In addition, following certain corporate events that occur prior to the maturity date, or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event or notice of redemption, as the case may be, as described under “Description of the Convertible Notes—Conversion Rights—Increase in Conversion Rate Upon Conversion Upon a Make Whole Fundamental Change or Notice of Redemption.”
You will not receive any additional cash payment or additional common shares representing accrued and unpaid interest, if any, upon conversion of a Convertible Note, except in limited circumstances. Instead, interest will be deemed to be paid by the cash, common shares or a combination of cash and common shares paid or delivered, as the case may be, to you upon conversion of a Convertible Note.
We may not redeem the Convertible Notes prior to January 15, 2022. We may redeem all or any portion of the Convertible Notes for cash at our option on or after January 15, 2022 if the last reported sale price of our common shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30-consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No “sinking fund” is provided for the Convertible Notes, which means that we are not required to redeem or retire the Convertible Notes periodically.
