CLEVELAND, Jan. 27, 2016 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today announced the commencement of
private offers to exchange up to $710
million aggregate principal amount of its newly issued 8.00%
1.5 Lien Senior Secured Notes due 2020 (the "New 1.5 Lien Notes")
for certain outstanding notes of Cliffs, upon the terms and subject
to the conditions set forth in the Company's offering memorandum
dated January 27, 2016.
The following table sets forth each series of outstanding senior
unsecured and secured notes subject to the exchange offers (the
"Existing Notes") and indicates the applicable consideration
offered for such series in the exchange offers for the Existing
Notes (the "Exchange Offers").
|
|
|
Principal Amount
of New 1.5 Lien Notes(1)
|
Title of
Series/CUSIP Number
of Existing Notes
|
Maturity
Date
|
Aggregate
Principal
Amount Outstanding
|
Exchange
Consideration
|
Early Tender
Premium
|
Total Exchange
Consideration(2)
|
3.95% Senior Notes
due 2018
/18683K AF8*
|
January 15,
2018
|
$311,161,000
|
$450.00
|
$50.00
|
$500.00
|
5.90% Senior Notes
due 2020
/18683K
AA9
|
March 15,
2020
|
$290,779,000
|
$350.00
|
$50.00
|
$400.00
|
7.75% Second Lien
Notes due
2020 /18683K AG6/
U18618AA3
|
March 31,
2020
|
$544,156,000
|
$450.00
|
$50.00
|
$500.00
|
4.80% Senior Notes
due 2020
/18683K
AB7
|
October 1,
2020
|
$306,667,000
|
$350.00
|
$50.00
|
$400.00
|
4.875% Senior Notes
due 2021
/18683K AD3
|
April 1,
2021
|
$412,528,000
|
$350.00
|
$50.00
|
$400.00
|
6.25% Senior Notes
due 2040
/18683K AC5
|
October 1,
2040
|
$492,815,000
|
$340.00
|
$50.00
|
$390.00
|
|
|
|
|
|
|
(1) For each
$1,000 principal amount of Existing Notes.
|
|
(2) Includes
Early Tender Premium
|
|
|
|
|
* The interest rate payable
on our 3.95% Senior Notes due 2018 is subject to adjustment in the
event of a change in the credit
ratings and is
currently at the maximum interest rate of 5.95% per
annum.
|
Eligible holders must validly tender their Existing Notes at or
prior to 5:00 p.m., New York City time, on February 9, 2016 (the "Early Tender Date"), in
order to be eligible to receive the applicable "Total Exchange
Consideration" shown in the table above, which includes the "Early
Tender Premium". Existing Notes tendered after the Early Tender
Date but prior to expiration of the Exchange Offers will be
eligible to receive only the applicable "Exchange
Consideration".
The Exchange Offers will expire at 5:00
p.m., New York City time,
on February 26, 2016 (the "Expiration
Date"). Tenders of Existing Notes may not be withdrawn after
5:00 p.m., New York City time, on February 9, 2016, except in certain limited
circumstances described in the offering memorandum and related
letter of transmittal.
Eligible holders of Existing Notes accepted for exchange in the
Exchange Offers will also receive a cash payment equal to the
accrued and unpaid interest in respect of such Existing Notes from
the applicable most recent interest payment date to, but not
including, the settlement date of the Exchange Offers. Interest on
the New 1.5 Lien Notes will accrue from such settlement date, which
will occur promptly after the Expiration Date.
The New 1.5 Lien Notes will be unconditionally and irrevocably
guaranteed by subsidiaries which directly or indirectly own
substantially all of our domestic assets. The Existing Notes, other
than the 7.75% Second Lien Notes due 2020 (the "Second Lien
Notes"), are unsecured and are not guaranteed by any subsidiaries.
The New 1.5 Lien Notes will be secured by (1) junior first priority
liens on substantially all of our assets and the assets of the
subsidiary guarantors, except for the "ABL Collateral," which
consists of accounts receivable, inventory and other assets
securing our asset-based lending facility (the "ABL Facility"), and
(2) junior second priority liens on the ABL Collateral.
Accordingly, any Existing Notes that remain outstanding after the
Exchange Offers will be (1) other than the Second Lien Notes,
structurally subordinated to the subsidiary guarantees of the New
1.5 Lien Notes and (2) effectively subordinated to the New 1.5
Lien Notes to the extent of the collateral for the New 1.5 Lien
Notes.
The aggregate principal amount of New 1.5 Lien Notes to be
issued in the Exchange Offers is limited to $710 million (the "Maximum Exchange Amount"). In
the event that the Exchange Offers are oversubscribed, only an
aggregate principal amount of Existing Notes that results in the
issuance of New 1.5 Lien Notes not in excess of the Maximum
Exchange Amount will be accepted for exchange. Pursuant to
this structure, validly tendered Existing Notes will be accepted
for exchange on a pro rata basis for each tender in proportion to
the aggregate principal amount of Existing Notes tendered in the
Exchange Offers, with no series of Existing Notes having priority
over any other series of Existing Notes to be exchanged pursuant to
the Exchange Offers, provided that 3.95% Senior Notes due 2018 will
be accepted for exchange before any other Existing Notes, and
accordingly will not be subject to any proration.
The Exchange Offers are conditioned on the satisfaction or
waiver of certain customary additional conditions, as described in
the offering memorandum and related letter of transmittal. The
Exchange Offers are not conditioned upon any minimum amount of
Existing Notes being tendered. The Exchange Offers for the Existing
Notes may be amended, extended or terminated, in each case either
as a whole, or independently with respect to any one or more
particular series of Existing Notes.
The offering memorandum and other documents relating to the
Exchange Offers will only be distributed to holders who complete
and return an eligibility form confirming that they are (i)
"qualified institutional buyers" within the meaning of Rule 144A
under the Securities Act or (ii) not "U.S. persons" and are outside
of the United States within the
meaning of Regulation S under the Securities Act (such persons,
"Eligible Holders"). Holders who desire to obtain and complete an
eligibility form should either visit the website for this purpose
at http://www.gbsc-usa.com/eligibility/cliffs or call Global
Bondholder Services Corporation, the Information Agent and
Depositary for the Exchange Offers at (866) 470-4300 (toll-free) or
(212) 430-3774 (collect for banks and brokers).
The Company is making the Exchange Offers only by, and pursuant
to, the terms of the offering memorandum and related letter of
transmittal. Eligible Holders are urged to carefully read the
offering memorandum and related letter of transmittal before making
any decision with respect to the Exchange Offers. None of the
Company, the Dealer Managers, the Information Agent and the
Depositary make any recommendation as to whether Eligible Holders
should tender or refrain from tendering their Existing Notes.
Eligible Holders must make their own decision as to whether to
tender Existing Notes and, if so, the principal amount of the
Existing Notes to tender. The Exchange Offers are not being made to
holders of Existing Notes in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In any
jurisdiction in which the securities laws or blue sky laws require
the Exchange Offers to be made by a licensed broker or dealer, the
Exchange Offers will be deemed to be made on behalf of Cliffs by
the Dealer Managers, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
This press release does not constitute an offer to purchase
securities or a solicitation of an offer to sell any securities or
an offer to sell or the solicitation of an offer to purchase any
securities, nor does it constitute an offer or solicitation in any
jurisdiction in which such offer or solicitation is unlawful.
About Cliffs Natural Resources Inc.
Cliffs Natural
Resources Inc. is a leading mining and natural resources company in
the United States. The Company is
a major supplier of iron ore pellets to the North American steel
industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore
mining complex in Western
Australia. Driven by the core values of safety, social,
environmental and capital stewardship, Cliffs' employees endeavor
to provide all stakeholders operating and financial
transparency.
Forward-Looking Statements
This release contains
statements that constitute "forward-looking statements" within the
meaning of the federal securities laws. As a general matter,
forward-looking statements relate to anticipated trends and
expectations rather than historical matters. Forward-looking
statements are subject to uncertainties and factors relating to
Cliffs' operations and business environment that are difficult to
predict and may be beyond our control. Such uncertainties and
factors may cause actual results to differ materially from those
expressed or implied by the forward-looking statements. These
statements speak only as of the date of this release, and we
undertake no ongoing obligation, other than that imposed by law, to
update these statements. Uncertainties and risk factors that could
affect Cliffs' future performance and cause results to differ from
the forward-looking statements in this release include, but are not
limited to: trends affecting our financial condition, results of
operations or future prospects, particularly the continued
volatility of iron ore prices; availability of capital and our
ability to maintain adequate liquidity, in particular considering
borrowing base reductions from the sale of non-core assets such as
North American Coal; continued weaknesses in global economic
conditions, including downward pressure on prices caused by
oversupply or imported products, including the impact of any
reduced barriers to trade, reduced market demand and any change to
the economic growth rate in China;
our ability to reach agreement with our iron ore customers
regarding any modifications to sales contract provisions, renewals
or new arrangements; uncertainty relating to restructurings in the
steel industry and/or affecting the steel industry; our ability to
maintain appropriate relations with unions and employees and enter
into or renew collective bargaining agreements on satisfactory
terms; the impact of our customers reducing their steel production
or using other methods to produce steel; our ability to
successfully execute an exit option for our Canadian Entities that
minimizes the cash outflows and associated liabilities of such
entities, including the Companies' Creditors Arrangement Act
(Canada) process; our ability to
successfully identify and consummate any strategic investments and
complete planned divestitures; our ability to successfully
diversify our product mix and add new customers beyond our
traditional blast furnace clientele; the outcome of any contractual
disputes with our customers, joint venture partners or significant
energy, material or service providers or any other litigation or
arbitration; the ability of our customers and joint venture
partners to meet their obligations to us on a timely basis or at
all; the impact of price-adjustment factors on our sales contracts;
changes in sales volume or mix; our actual levels of capital
spending; our actual economic iron ore reserves or reductions in
current mineral estimates, including whether any mineralized
material qualifies as a reserve; events or circumstances that could
impair or adversely impact the viability of a mine and the carrying
value of associated assets, as well as any resulting impairment
charges; the results of prefeasibility and feasibility studies in
relation to projects; impacts of existing and increasing
governmental laws and regulation and related costs and liabilities,
including failure to receive or maintain required operating and
environmental permits, approvals, modifications or other
authorization of, or from, any governmental or regulatory entity
and costs related to implementing improvements to ensure compliance
with regulatory changes; our ability to cost-effectively achieve
planned production rates or levels; uncertainties associated with
natural disasters, weather conditions, unanticipated geological
conditions, supply or price of energy, equipment failures and other
unexpected events; adverse changes in currency values, currency
exchange rates, interest rates and tax laws; risks related to
international operations; availability of capital equipment and
component parts; the potential existence of significant
deficiencies or material weakness in our internal control over
financial reporting; problems or uncertainties with productivity,
tons mined, transportation, mine-closure obligations or costs,
environmental liabilities, employee-benefit costs and other risks
of the mining industry; the satisfaction of the conditions
precedent to completing the Exchange Offers and our ability to
consummate any or all of the Exchange Offers; and the risk factors
identified in Part I - Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2014
and in Part II - Item 1A of our Quarterly Reports on Form 10-Q for
the quarterly periods ended March 31,
2015, June 30, 2015 and
September 30, 2015. The information
contained herein speaks as of the date of this release and may be
superseded by subsequent events. Except as may be required by
applicable securities laws, we do not undertake any obligation to
revise or update any forward-looking statements contained in this
release.
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SOURCE Cliffs Natural Resources Inc.