Cleveland-Cliffs Inc. Proposes $750 Million Senior Unsecured Guaranteed Notes Offering

Cleveland-Cliffs Inc. (NYSE: CLF), a leading North America-based steel producer, has announced its intention to offer $750 million in Senior Unsecured Guaranteed Notes due 2031. The offering is exempt from the registration requirements of the Securities Act of 1933 and will be exclusively offered to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S. The Notes will be backed by guarantees from Cliffs' material direct and indirect wholly-owned domestic subsidiaries, excluding certain subsidiaries. The company plans to use the net proceeds for general corporate purposes, including repaying borrowings under its asset-based credit facility.



The proposed offering aligns with Cleveland-Cliffs' long-term debt management strategy, as it seeks to extend its debt maturity profile, strengthen its credit profile, and optimize its capital structure. The 2031 maturity date indicates confidence in the company's long-term operations and provides extended runway for debt management. The subsidiary guarantees strengthen the Notes' credit profile, potentially attracting better pricing despite the cyclical nature of the steel industry. The timing of the offering aligns with the broader trend of companies securing longer-term financing before potential rate changes, though at likely higher costs than previous years.

The success and pricing of the offering will likely be influenced by market reception and Cleveland-Cliffs' operational performance in the steel market. A positive market reception and strong operational performance could lead to a higher demand and better pricing for the Notes, while a negative market reception and poor operational performance could result in a lower demand and less favorable pricing. Cleveland-Cliffs' recent operational results, such as record steel shipments, robust free cash flow, and reduced net debt, could contribute to a more favorable market reception for the Notes offering.

In conclusion, Cleveland-Cliffs' proposed offering of $750 million in Senior Unsecured Guaranteed Notes is a strategic move that aligns with the company's long-term debt management strategy. The success and pricing of the offering will depend on market reception and the company's operational performance in the steel market. Investors should closely monitor Cleveland-Cliffs' financial performance and market reception to make informed decisions about the Notes offering.