Cleveland-Cliffs Inc.
10/10/2025 | Press release | Distributed by Public on 10/10/2025 15:08
Material Agreement, Financial Obligation (Form 8-K)
| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 10, 2025, Cleveland-Cliffs Inc. (the "Company") issued an additional $275,000,000 aggregate principal amount of 7.625% Senior Guaranteed Notes due 2034 (the "Additional Notes") in a private transaction exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act"). The Additional Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
The Additional Notes are an issuance of the Company's existing 7.625% Senior Guaranteed Notes due 2034 and were issued pursuant to the indenture, dated as of September 8, 2025 (the "Base Indenture"), among the Company, the guarantors party thereto (the "Guarantors") and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the First Supplemental Indenture, dated as of October 10, 2025, among the Company, the Guarantors and the Trustee (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"). The Company previously issued $850,000,000 aggregate principal amount of 7.625% Senior Guaranteed Notes due 2034 (the "Initial Notes" and, together with the Additional Notes, the "Notes"). The Additional Notes were issued at a price of 102.75% of their principal amount. The Additional Notes are treated as the same class and series as, and otherwise identical to, the Initial Notes other than with respect to the date of issuance and the issue price.
The Notes bear interest at an annual rate of 7.625%. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2026. The Notes will mature on January 15, 2034.
The Notes are the Company's general unsecured senior obligations and rank equally in right of payment with all of the Company's existing and future unsecured senior indebtedness and rank senior in right of payment to all of the Company's existing and future subordinated indebtedness. The Notes are effectively subordinated to the Company's existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. The Notes are guaranteed on an unsecured senior basis by the Company's material direct and indirect wholly-owned domestic subsidiaries and, therefore, are structurally senior to any of the Company's existing and future indebtedness that is not guaranteed by such Guarantors and are structurally subordinated to all existing and future indebtedness and other liabilities of the Company's subsidiaries that do not guarantee the Notes.
The terms of the Notes are governed by the Indenture. The Indenture contains customary covenants that, among other things, limit the Company's and its subsidiaries' ability to create certain liens on property that secure indebtedness, enter into sale and leaseback transactions, merge or consolidate with another company, and transfer or sell all or substantially all of the Company's assets. Upon the occurrence of a "change of control triggering event," as defined in the Indenture, the Company is required to offer to repurchase the Notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The Company may, at its option, redeem some or all of the Notes at any time and from time to time prior to January 15, 2029, at a price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a "make-whole" premium.
From and after January 15, 2029, the Company may, at its option, redeem some or all of the Notes at an initial redemption price of 103.813% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Such redemption price will decline each year after January 15, 2029, and will be 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest, beginning on January 15, 2031.
In addition, at any time and from time to time on or prior to January 15, 2029, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of certain equity offerings, at a redemption price of 107.625%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least 65% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of additional notes) issued under the Indenture remain outstanding after each such redemption.
The Indenture contains customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to pay or acceleration of certain other indebtedness, certain
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events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the Indenture would allow either the Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding Notes to accelerate, or in certain cases, would automatically cause the acceleration of, the amounts due under the Notes.
The Company intends to use the net proceeds from the Additional Notes to repay borrowings under its asset-based credit facility.
The foregoing description of the Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of the Base Indenture and the Supplemental Indenture, copies of which are anticipated to be filed as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. | ||||
The terms of the Indenture and the Notes are summarized in Item 1.01 of this Current Report on Form 8-K and are incorporated into this Item 2.03 by reference.
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