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Cleveland-Cliffs (CLF) Upsizes & Prices $825M of Unsecured Notes
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Cleveland-Cliffs Inc. (CLF - Free Report) announced that it has upsized and priced $825 million, a total principal amount of senior unsecured guaranteed notes due 2032, in an offering exempt from the Securities Act of 1933's registration requirements.
The Notes will bear an annual interest rate of 7.000% and will be issued at par. Except for certain excluded subsidiaries, the company's substantial direct and indirect wholly-owned domestic subsidiaries will provide a senior unsecured guarantee for the Notes. The offering is slated to close on Mar 18, 2024, subject to customary closing conditions.
The net proceeds from the Notes, paired with available liquidity, are expected to be used to repurchase or redeem all of the company's existing 6.750% Senior Secured Notes due 2026.
The Notes and related guarantees are only available to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.
The Notes and related guarantees have not been registered under the Securities Act or any state or other jurisdiction's securities laws, and they may not be offered or sold in the United States unless registered or exempt from the Securities Act, applicable state securities or blue sky laws and foreign securities laws.
Shares of Cleveland-Cliffs have lost 6.4% over the past year compared with a 3.1% decline of its industry.
Image Source: Zacks Investment Research
The company expects steel shipment of 16.5 million net tons for 2024, up from 16.4 million net tons in 2023. Steel unit costs are predicted to be down by about $30 per net ton, resulting in an adjusted EBITDA benefit of almost $500 million over 2023 levels. Capital expenditures for 2024 are forecast in the range of $675 million to $725 million.
CLF expects adjusted EBITDA to be significantly higher in the first quarter of 2024 than the prior month.
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include United States Steel Corporation (X - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
United States Steel carrying a Zacks Rank #1 (Strong Buy). X beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 54.8%. The company’s shares have soared 59.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained 30% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 24.8%, on average. AMR shares are up around 108% in a year.
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Cleveland-Cliffs (CLF) Upsizes & Prices $825M of Unsecured Notes
Cleveland-Cliffs Inc. (CLF - Free Report) announced that it has upsized and priced $825 million, a total principal amount of senior unsecured guaranteed notes due 2032, in an offering exempt from the Securities Act of 1933's registration requirements.
The Notes will bear an annual interest rate of 7.000% and will be issued at par. Except for certain excluded subsidiaries, the company's substantial direct and indirect wholly-owned domestic subsidiaries will provide a senior unsecured guarantee for the Notes. The offering is slated to close on Mar 18, 2024, subject to customary closing conditions.
The net proceeds from the Notes, paired with available liquidity, are expected to be used to repurchase or redeem all of the company's existing 6.750% Senior Secured Notes due 2026.
The Notes and related guarantees are only available to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.
The Notes and related guarantees have not been registered under the Securities Act or any state or other jurisdiction's securities laws, and they may not be offered or sold in the United States unless registered or exempt from the Securities Act, applicable state securities or blue sky laws and foreign securities laws.
Shares of Cleveland-Cliffs have lost 6.4% over the past year compared with a 3.1% decline of its industry.
Image Source: Zacks Investment Research
The company expects steel shipment of 16.5 million net tons for 2024, up from 16.4 million net tons in 2023. Steel unit costs are predicted to be down by about $30 per net ton, resulting in an adjusted EBITDA benefit of almost $500 million over 2023 levels. Capital expenditures for 2024 are forecast in the range of $675 million to $725 million.
CLF expects adjusted EBITDA to be significantly higher in the first quarter of 2024 than the prior month.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. price-consensus-chart | Cleveland-Cliffs Inc. Quote
Zacks Rank & Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include United States Steel Corporation (X - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
United States Steel carrying a Zacks Rank #1 (Strong Buy). X beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 54.8%. The company’s shares have soared 59.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained 30% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 24.8%, on average. AMR shares are up around 108% in a year.