Cliffs Natural Resources Inc. today announced the expiration of and final results for its offer to purchase for cash (the "Tender Offer") up to $123,694,000 (as previously increased, the "Maximum Amount") of its outstanding 3.95% Senior Notes due 2018 (the "Notes"). The Tender Offer expired at midnight, New York City time, on August 27, 2015 (the "Expiration Date").
According to information received from Global Bondholder Services Corporation, the Information Agent and Depositary for the Tender Offer, as of the Expiration Date, the total aggregate principal amount of the Notes validly tendered and not validly withdrawn was $124,839,000 (the "Tendered Amount"), which exceeded the Maximum Amount. The Tendered Amount includes $123,694,000 aggregate principal amount of the Notes validly tendered as of 5:00 p.m., New York City time, on August 13, 2015 (the "Early Tender Date") and $1,145,000 aggregate principal amount of the Notes validly tendered after the Early Tender Date but prior to the Expiration Date. Because the Maximum Amount was exceeded by no more than two percent of such amount, all Notes tendered in the Tender Offer will be accepted for purchase. In addition to the Total Consideration or Tender Offer Consideration (each as defined in the Offer to Purchase), holders of Notes accepted for purchase will also receive accrued and unpaid interest up to, but not including, the payment date for the Notes. The conditions to the Tender Offer have been satisfied; therefore, payment for the purchased Notes will be made today.
Lourenco Goncalves, Cliffs' Chairman of the Board, President and Chief Executive Officer, said "The tender offer has allowed us to make significant progress toward reducing our nearest-dated maturity, while achieving a $125 million reduction in total debt, an $18 million reduction in interest expense until maturity, and a $56 million equity value creation through discount capture." Mr. Goncalves added: "As we continue to demonstrate our commitment to actively manage our outstanding debt and take advantage of the opportunities offered by the capital markets, we would like to thank our investors for their demonstration of support to our U.S. centric strategy, which continues to differentiate Cliffs from those fully exposed to the volatility of China."
Merrill Lynch, Pierce, Fenner & Smith Incorporated served as Dealer Manager for the Tender Offer. Global Bondholder Services Corporation served as the Information Agent and Depositary for the Tender Offer. Questions regarding the Tender Offer may be directed to Merrill Lynch, Pierce, Fenner & Smith Incorporated at 214 North Tryon Street, Charlotte, North Carolina 28255, Attn: Debt Advisory, (888) 292-0070 (toll-free), (980) 388-3646 (collect).
This press release shall not constitute an offer to sell nor the solicitation of an offer to buy the Notes. The Tender Offer was not made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not have been in compliance with the securities, blue sky or other laws of such jurisdiction.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is a leading mining and natural resources company in the United States. The Company is a major supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore mining complex in Western Australia. Additionally, Cliffs produces low-volatile metallurgical coal in the U.S. from its mines located in Alabama and West Virginia. Driven by the core values of safety, social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. News releases and other information on the Company are available at www.cliffsnaturalresources.com.
This release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to uncertainties and factors relating to Cliffs' operations and business environment that are difficult to predict and may be beyond our control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These statements speak only as of the date of this release, and we undertake no ongoing obligation, other than that imposed by law, to update these statements. Uncertainties and risk factors that could affect Cliffs' future performance and cause results to differ from the forward-looking statements in this release include, but are not limited to: our ability to successfully execute an exit option for our Canadian entities that minimizes the cash outflows and associated liabilities of such entities, including the Companies' Creditors Arrangement Act (Canada) process; trends affecting our financial condition, results of operations or future prospects, particularly the continued volatility of iron ore and coal prices; availability of capital and our ability to maintain adequate liquidity; uncertainty or weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, reduced market demand and any change to the economic growth rate in China; our ability to successfully identify and consummate any strategic investments and complete planned divestitures, including with respect to our North American Coal operating segment; our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele; the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration; the ability of our customers and joint venture partners to meet their obligations to us on a timely basis or at all; our ability to reach agreement with our iron ore customers regarding any modifications to sales contract provisions or renewals; the impact of price-adjustment factors on our sales contracts; changes in sales volume or mix; our actual levels of capital spending; our actual economic iron ore and coal reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve; the impact of our customers using other methods to produce steel or reducing their steel production; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets, as well as any resulting impairment charges; the results of prefeasibility and feasibility studies in relation to projects; impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory changes; our ability to cost-effectively achieve planned production rates or levels; uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy, equipment failures and other unexpected events; adverse changes in currency values, currency exchange rates, interest rates and tax laws; our ability to maintain appropriate relations with unions and employees and enter into or renew collective bargaining agreements on satisfactory terms; risks related to international operations; availability of capital equipment and component parts; the potential existence of significant deficiencies or material weakness in our internal control over financial reporting; problems or uncertainties with productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry; and other factors and risks that are set forth in the Company's most recently filed reports with the U.S. Securities and Exchange Commission. The information contained herein speaks as of the date of this release and may be superseded by subsequent events. Except as may be required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in this release.