CLEVELAND - Cleveland-Cliffs Inc. (NYSE: NYSE:CLF), a major North American steel producer, announced its intention to offer $750 million in senior unsecured guaranteed notes due in 2032. This offering is exempt from the registration requirements of the Securities Act of 1933 and is subject to market conditions and other factors.
The company detailed that the notes will be guaranteed by its material direct and indirect wholly-owned domestic subsidiaries, excluding certain subsidiaries. Cleveland-Cliffs aims to use the proceeds from this offering, combined with available liquidity, to repurchase or redeem all of its outstanding 6.750% Senior Secured Notes due in 2026.
The sale of the notes and related guarantees will be targeted at qualified institutional buyers under Rule 144A and to non-U.S. persons outside the United States under Regulation S of the Securities Act. These securities have not been registered under the Securities Act or any state securities laws, and they cannot be offered or sold in the United States without registration or an exemption from these requirements.
Cleveland-Cliffs, established in 1847, is the largest flat-rolled steel producer and the largest manufacturer of iron ore pellets in North America. The company's operations are vertically integrated, ranging from mining raw materials to primary steelmaking and downstream processing. With its headquarters in Cleveland, Ohio, the company employs approximately 28,000 people across its operations in the United States and Canada.
The information in this article is based on a press release statement from Cleveland-Cliffs Inc.
InvestingPro Insights
As Cleveland-Cliffs Inc. (NYSE: CLF) continues to navigate the competitive steel industry, recent data from InvestingPro provides valuable insights into the company's financial health and market performance. With a current market capitalization of $10.5 billion, Cleveland-Cliffs stands as a prominent player in the Metals & Mining industry.
InvestingPro Tips highlight that management has been actively engaging in share buybacks, signaling confidence in the company's future. This is coupled with a strong shareholder yield, which could attract investors looking for companies with a history of returning value to shareholders. Furthermore, analysts predict that Cleveland-Cliffs will be profitable this year, with net income expected to grow, a detail that aligns with the company's strategic financial maneuvers, such as the recent offering of senior unsecured guaranteed notes.
From a valuation standpoint, Cleveland-Cliffs' adjusted P/E ratio over the last twelve months as of Q4 2023 stands at 23.3, which, combined with a strong free cash flow yield, suggests the company may be undervalued. This could present an opportunity for investors seeking to capitalize on potential market mispricings.
InvestingPro Data reveals a gross profit margin of 6.32% over the last twelve months as of Q4 2023, which, despite being on the lower side, is mitigated by the company's scale and vertical integration. Additionally, the stock has experienced a significant price uptick over the last six months, with a 35.91% total return, reflecting strong market confidence.
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