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Cleveland-Cliffs (CLF) Prices $600M Senior Notes for Stelco Deal
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Cleveland-Cliffs Inc. (CLF - Free Report) announced that it upsized and priced an additional $600 million in Senior Guaranteed Notes due 2032. This offering, exempt from registration under the Securities Act of 1933, features Additional Notes with an annual interest rate of 7%, issued at 99.25% of their principal amount. The Notes will be guaranteed on a senior unsecured basis by Cliffs’ key direct and indirect wholly-owned domestic subsidiaries, excluding certain subsidiaries.
This upsized offering reduces the amount of capital Cliffs will need to raise for the previously announced acquisition of Stelco. The Additional Notes Offering is expected to close on Aug 16, 2024, pending customary closing conditions, with pro-forma liquidity estimated at approximately $4.3 billion upon completion.
Cliffs plans to use the net proceeds from this offering to finance part of the cash consideration for the Stelco Acquisition, which is anticipated to close in the fourth quarter of 2024, following the satisfaction or waiver of applicable conditions. Before completing the Stelco Acquisition, Cliffs intends to apply the proceeds to fully pay off its outstanding balance under the asset-based lending facility and for cash on hand.
Shares of CLF are down 16.3% in the past year compared with a 0.8% rise of its industry.
Image Source: Zacks Investment Research
CLF reported adjusted earnings of 11 cents per share for the second quarter of 2024, a significant drop from 69 cents in the same quarter last year. This result exceeded the Zacks Consensus Estimate, which was pegged at break-even. Revenues declined 14.9% to $5,092 million, missing the Zacks Consensus Estimate of $5,199.9 million.
The company also revised its capital expenditures for 2024, lowering the forecast to $650-$700 million from the previously expected $675-$725 million. Additionally, CLF is on track with its goal of reducing steel unit costs by approximately $30 per net ton year over year in 2024.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75% from year-ago levels. The consensus estimate for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 23.6% in the past year.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%.
The Zacks Consensus Estimate for AEM’s current fiscal year earnings is pegged at $3.65, indicating a year-over-year rise of 63.7%. AEM’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average earnings surprise being 15.7%. The company’s shares have increased 59.5% in the past year.
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Cleveland-Cliffs (CLF) Prices $600M Senior Notes for Stelco Deal
Cleveland-Cliffs Inc. (CLF - Free Report) announced that it upsized and priced an additional $600 million in Senior Guaranteed Notes due 2032. This offering, exempt from registration under the Securities Act of 1933, features Additional Notes with an annual interest rate of 7%, issued at 99.25% of their principal amount. The Notes will be guaranteed on a senior unsecured basis by Cliffs’ key direct and indirect wholly-owned domestic subsidiaries, excluding certain subsidiaries.
This upsized offering reduces the amount of capital Cliffs will need to raise for the previously announced acquisition of Stelco. The Additional Notes Offering is expected to close on Aug 16, 2024, pending customary closing conditions, with pro-forma liquidity estimated at approximately $4.3 billion upon completion.
Cliffs plans to use the net proceeds from this offering to finance part of the cash consideration for the Stelco Acquisition, which is anticipated to close in the fourth quarter of 2024, following the satisfaction or waiver of applicable conditions. Before completing the Stelco Acquisition, Cliffs intends to apply the proceeds to fully pay off its outstanding balance under the asset-based lending facility and for cash on hand.
Shares of CLF are down 16.3% in the past year compared with a 0.8% rise of its industry.
Image Source: Zacks Investment Research
CLF reported adjusted earnings of 11 cents per share for the second quarter of 2024, a significant drop from 69 cents in the same quarter last year. This result exceeded the Zacks Consensus Estimate, which was pegged at break-even. Revenues declined 14.9% to $5,092 million, missing the Zacks Consensus Estimate of $5,199.9 million.
The company also revised its capital expenditures for 2024, lowering the forecast to $650-$700 million from the previously expected $675-$725 million. Additionally, CLF is on track with its goal of reducing steel unit costs by approximately $30 per net ton year over year in 2024.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. price-consensus-chart | Cleveland-Cliffs Inc. Quote
Zacks Rank & Key Picks
CLF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Newmont Corporation (NEM - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) . Newmont and Franco-Nevada sport a Zacks Rank #1 (Strong Buy), and Agnico Eagle carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75% from year-ago levels. The consensus estimate for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 23.6% in the past year.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%.
The Zacks Consensus Estimate for AEM’s current fiscal year earnings is pegged at $3.65, indicating a year-over-year rise of 63.7%. AEM’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average earnings surprise being 15.7%. The company’s shares have increased 59.5% in the past year.