Replies to post #21853 on The Rising Influence of Rising Affluence

[jbog]

I'm not a bond guy at all, but does this represent effectively 10.975% ?

5.5% discount + 9.875%

[DewDiligence]

CLF—Preliminary 1Q20 results—new cost-cutting measures:

http://www.clevelandcliffs.com/English/news-center/news-releases/news-releases-details/2020/Cleveland-Cliffs-Inc-Provides-Company-Update/default.aspx

Highlights:

• Estimated 1Q20 revenue: $345-375M.

• Estimated 1Q20 EBITDA = $15-25M.

• Pellets still being shipped to non-automotive customers.

• Future dividends may be suspended (a regular quarterly dividend was paid yesterday).

• Liquidity in pretty good shape, especially after new $400M bond floatation (announced yesterday, later in the day than this PR).

--
I somehow missed this PR yesterday amid the other fireworks.

[DewDiligence]

CLF can clawback 35% of $400M new debt via provision in recently enacted Cares Act:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=155088752

This puts the >10% yield-to-maturity on the new notes in an altogether different light.

h/t ‘winchem’.

[DewDiligence]

CLF reduces debt by $181M—using $555M proceeds from newly issued 5yr notes* to redeem $736M of existing notes at a discount:

https://finance.yahoo.com/news/cleveland-cliffs-inc-announces-offering-100000420.html

*The $555M of new 5yr notes have identical terms as the $400M of notes issued on 4/15/20 (#msg-155041860); however, the new $555M of notes were issued at 99% of face value (compared to 94.5% of face value for the 4/15/20 tranche), so the yield-to-maturity is about 100 basis points lower than for the 4/15/20 tranche.