Replies to post #5346 on Cleveland Cliffs Inc (CLF)

[sts66]

I noticed that - loan shark terms! And if they can't get their cash burn rate slashed it's only enough money for 3.5 months of OPEX.

[winchem21]

Someone on twitter mentioned this could be structured debt prelude to CARES act loan to claw back up to 35% on notes.

Dividend elimination, CEO pay cut, notes all happened quickly and simultaneously...otherwise why the rush to get this bloated rate?

[DewDiligence]

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 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.