Cliffs Resources Announces Proposed Offering of $500 Million Senior Secured Notes

Cliffs Natural Resources Inc. (NYSE:CLF) announced its proposal offer to sell $500 million of senior secured notes due 2020. The offering will be exempt from the registration requirements of the Securities Act of 1933.

As quoted in the press release:

The New First Lien Notes will be jointly and severally and fully and unconditionally guaranteed on a senior secured basis by substantially all of Cliffs’ material domestic subsidiaries and will be secured (subject in each case to certain exceptions and permitted liens) by (i) a first-priority lien on substantially all of Cliffs’ assets and the assets of the guarantors (other than accounts receivable and other rights to payment, inventory, as-extracted collateral, investment property, certain general intangibles and commercial tort claims, certain mobile equipment, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds and products of each of the foregoing (collectively, the “ABL Collateral”)), and (ii) a second-priority lien (junior to the ABL Facility (as defined below)) on the ABL Collateral. Cliffs’ assets and the assets of the guarantors that secure the New First Lien Notes on a first-priority basis, together with the ABL Collateral, will include substantially all of the assets of Cliffs and the guarantors, subject to certain customary exceptions.

The Company intends to use the net proceeds from the offering of the New First Lien Notes to repay all amounts outstanding under its existing revolving credit facility and for general corporate purposes. The proposed New First Lien Notes offering is conditioned on the replacement of the Company’s existing revolving credit facility with a new senior secured asset-based credit facility. This is not an offer to sell or the solicitation of an offer to buy any securities. The New First Lien Notes and related guarantees are being offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.

Click here to read the full Cliff Natural Resources Inc. (NYSE:CLF) press release.