CLEVELAND, Feb. 10, 2016 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today announced the results to date of
its pending private offers to exchange (the "Exchange Offers") 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 listed in
the table below (the "Existing Notes"). As of 5:00
p.m., New York City time, on February 9,
2016 (the "Early Tender Date"), a total of
approximately $465.3 million principal amount of Existing
Notes had been tendered in the Exchange Offers.
Cliffs also announced that the Early Tender Date for the
Exchange Offers has been extended to 5:00
p.m., New York City time,
on February 26, 2016, and that the
Exchange Consideration for the 3.95% Senior Notes due 2018 has
increased as set forth below. Accordingly, all Existing Notes
tendered prior to the extended Early Tender Date will be eligible
to receive the "Total Exchange Consideration" shown in the table
below, which includes the "Early Tender Premium" of $50 in principal amount of the New 1.5 Lien
Notes.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer said, "We are very
pleased with the early results of the debt exchange which to date
will generate annual interest expense savings of $13 million and debt reduction of $268 million. Furthermore, with 17 days remaining
in the exchange offer, we are extending the early tender deadline
across the entire series of bonds as well as increasing the total
exchange consideration on the 3.95% Senior Notes due 2018 from
$500 to $650. We believe this
additional consideration will provide further incentive for the
holders of the 3.95% Senior Notes due 2018 to participate in this
exchange."
|
|
Principal Amount
of New 1.5 Lien Notes(1)
|
|
Title of
Series/CUSIP Number of
Existing Notes
|
Aggregate
Principal Amount
Outstanding
(millions)
|
Exchange
Consideration
|
Early Tender
Premium
|
Total Exchange
Consideration(2)
|
Aggregate
Principal Amount
Tendered
(millions)
|
3.95% Senior Notes
due 2018 /18683K AF8*
|
$311.2
|
$600.00
|
$50.00
|
$650.00
|
$14.8
|
5.90% Senior Notes
due 2020 /18683K AA9
|
$290.8
|
$350.00
|
$50.00
|
$400.00
|
$53.8
|
7.75% Second Lien
Notes due 2020 /18683K AG6/ U18618AA3
|
$544.2
|
$450.00
|
$50.00
|
$500.00
|
$92.0
|
4.80% Senior Notes
due 2020 /18683K AB7
|
$306.7
|
$350.00
|
$50.00
|
$400.00
|
$42.7
|
4.875% Senior Notes
due 2021 /18683K AD3
|
$412.5
|
$350.00
|
$50.00
|
$400.00
|
$69.4
|
6.25% Senior Notes
due 2040 /18683K AC5
|
$492.8
|
$340.00
|
$50.00
|
$390.00
|
$192.6
|
|
|
(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.
|
The aggregate principal amount of New 1.5 Lien Notes to be
issued for all validly tendered Existing Notes is approximately
$197 million based on the results as
of the Early Tender Date. Under the terms of the Exchange
Offers, 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").
The Exchange Offers will expire at 5:00
p.m., New York City time,
on February 26, 2016 (the "Expiration
Date"). The deadline for investors to withdraw tenders of Existing
Notes has passed. Accordingly, tendered Existing Notes may no
longer be withdrawn, 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 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, as amended by this press release. 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-announces-results-to-date-of-exchange-offers-for-senior-notes-extension-of-early-tender-date-and-increase-to-the-2018-senior-notes-offer-300218043.html
SOURCE Cliffs Natural Resources Inc.