To pay off the debt of its purchase of Stelco, Cleveland-Cliffs is selling $850 million in notes.
The company has a debt load of $7.727 billion, which analysts consider high, and rose dramatically by nearly $4 billion within the past year due to its acquisition of Stelco, formerly U.S. Steel Canada. While struggling with debt and faced with sluggish steel prices, Cleveland-Cliffs has idled facilities across the country, including south suburban Riverdale, transferring the orders it handled to the nearby Indiana Harbor Works in East Chicago.
Senior unsecured guaranteed notes being offered by the Cleveland-based steelmaker that will come due in 2034. The notes will pay an annual interest rate of 7.635% upon redemption. It also will repay borrowings of its asset-based credit facility that helps bankroll routine operations.
The steel-company employs more than 30,000 people in North America and is one of the largest industrial employers in the Calumet Region. For more than a century, it was an iron ore supplier that shipped the steelmaking ingredient to the Region's steel mills via lake freighter on the Great Lakes.
Cleveland-Cliffs plans to close on its offering of notes on Sept. 8.
