Cleveland-Cliffs Inc (NYSE:CLF) reported pricing of its previously reported registered public offering of $275 million total principal sum of its “Convertible Notes” or up to a total of $316.25 million aggregate principal sum of Convertible Notes in case the underwriters use their over-allotment right in full. The offering is projected to close on December 19, 2017, depending on satisfaction of usual closing conditions.
The Convertible Notes mark as senior unsecured debts of Cleveland-Cliffs. These Convertible Notes will have interest at a rate of 1.5% a year, to be paid semiannually in sum unpaid on January 15 and July 15 annually, starting on July 15, 2018. The company reported the maturity date of Convertible Notes as January 15, 2025, unless earlier redeemed, repurchased or converted according to the guidelines prior to such date.
Before July 15, 2024, these “Convertible Notes” will be convertible exclusively upon the occurrence of specific events and during specific periods, and post that, at any time until the next planned trading day immediately earlier to the maturity date. The preliminary conversion rate is fixed at 122.4365 common shares equivalent to $0.125 per share, of the firm per $1,000 principal sum of Convertible Notes, par to an initial conversion rate of around $8.17 per Common Share.
The conversion price will be subject to changes in some events, however will not be changed for accrued and outstanding interest. Cleveland-Cliffs reported that the Convertible Notes can be converted into Common Shares, cash or a combination of both, at company’s election. The company may not use the Convertible Notes excepting, on or after January 15, 2022, during certain periods and upon the incidence of certain events. No “sinking fund” is offered for the Convertible Notes. The firm plans to utilize the net proceeds from the Convertible Notes offering, together with the net proceeds from its initially reported concurrent secured notes offering.