Bulletin: Cleveland-Cliffs Inc.'s $120 Million Add-On To Its Senior Secured Notes Is Credit Neutral

NEW YORK (S&P Global Ratings) June 16, 2020--S&P Global Ratings said today that its 'B' issue-level rating and '2' recovery rating on U.S.-based iron ore and steel producer Cleveland-Cliffs Inc.'s existing senior secured notes due 2026 are not affected by the company's $120 million add on. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default. The company will use the net proceeds from this offering to finance the construction of its hot briquetted iron production plant and pay down some of the asset-based lending facility borrowings ($650 million currently outstanding). We expect Cliff's adjusted debt leverage to remain high, in the 8x-10x range, in 2020 due to production

...June 16, 2020 NEW YORK (S&P Global Ratings) June 16, 2020--S&P Global Ratings said today that its 'B' issue-level rating and '2' recovery rating on U.S.-based iron ore and steel producer Cleveland-Cliffs Inc.'s existing senior secured notes due 2026 are not affected by the company's $120 million add on. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default. The company will use the net proceeds from this offering to finance the construction of its hot briquetted iron production plant and pay down some of the asset-based lending facility borrowings ($650 million currently outstanding). We expect Cliff's adjusted debt leverage to remain high, in the 8x-10x range, in 2020 due to production cuts in the second quarter of 2020 and lower iron-ore and hot-rolled coil price assumptions in the next 12 months. Although the company has restarted its Tilden mine in Michigan ahead of schedule, we anticipate demand...

Bulletin