Obligation Cliffside Cliffs 5.875% ( US185899AH46 ) en USD

Cliffside Cliffs

97.561 % ▼

Etas-Unis

US185899AH46 ( en USD )

5.875% par an ( paiement semestriel )

01/06/2027

Prospectus brochure de l'obligation Cleveland-Cliffs US185899AH46 en USD 5.875%, échéance 01/06/2027

2 000 USD

750 000 000 USD

185899AH4

BB- ( Spéculatif )

Ba3 ( Spéculatif )

01/12/2025 ( Dans 176 jours )

Cleveland-Cliffs Inc. est une société américaine intégrée de production de fer et d'acier, opérant des mines de fer, des aciéries et des installations de transformation.

L'Obligation émise par Cliffside Cliffs ( Etas-Unis ) , en USD, avec le code ISIN US185899AH46, paye un coupon de 5.875% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 01/06/2027

L'Obligation émise par Cliffside Cliffs ( Etas-Unis ) , en USD, avec le code ISIN US185899AH46, a été notée Ba3 ( Spéculatif ) par l'agence de notation Moody's.

L'Obligation émise par Cliffside Cliffs ( Etas-Unis ) , en USD, avec le code ISIN US185899AH46, a été notée BB- ( Spéculatif ) par l'agence de notation Standard & Poor's ( S&P ).

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424B3 1 clf2020424b3prospectusdocu.htm 424B3
File d Pursua nt t o Rule 4 2 4 (b)(3 )
Re gist ra t ion N o. 3 3 3 -2 3 7 3 2 5
$ 7 5 0 ,0 0 0 ,0 0 0
Cle ve la nd-Cliffs I nc .
Offe r t o Ex c ha nge
All of t he Out st a nding Re st ric t e d 5 .8 7 5 % Se nior Gua ra nt e e d N ot e s due 2 0 2 7
I ssue d on M a y 1 3 , 2 0 1 9
for
N e w ly I ssue d a nd Re gist e re d 5 .8 7 5 % Se nior Gua ra nt e e d N ot e s due 2 0 2 7
On May 13, 2019, we issued $750 million aggregate principal amount of our restricted 5.875% Senior Guaranteed Notes
due 2027, which we refer to herein as the Original Notes. The Original Notes were issued in a private transaction exempt from the
registration requirements of the Securities Act of 1933, or the Securities Act.
We are offering to exchange up to $750 million aggregate principal amount of new 5.875% Senior Guaranteed Notes due
2027, which we refer to herein as the Exchange Notes, for the outstanding Original Notes. We refer herein to the Original Notes
and the Exchange Notes, collectively, as the Notes. We refer to the offer to exchange as the Exchange Offer.
The terms of the Exchange Notes will be substantially identical to the terms of the Original Notes, except that the
Exchange Notes will be registered under the Securities Act and the transfer restrictions and registration rights and related additional
interest provisions applicable to the Original Notes will not apply to the Exchange Notes. The Exchange Notes will be part of the
same series as the Original Notes and will be issued under the same indenture. The Exchange Notes will be exchanged for
Original Notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. We will not receive any
proceeds from the issuance of Exchange Notes in the Exchange Offer.
You may withdraw tenders of Original Notes at any time prior to the expiration of the Exchange Offer.
T he Ex c ha nge Offe r e x pire s a t 5 :0 0 p.m . N e w Y ork Cit y t im e on April 2 4 , 2 0 2 0 unle ss e x t e nde d, w hic h w e
re fe r t o a s t he Ex pira t ion Da t e .
We do not intend to list the Exchange Notes on any securities exchange or to seek approval through any automated quotation system,
and no active public market for the Exchange Notes is anticipated.
Y ou should c onside r c a re fully t he risk fa c t ors be ginning on pa ge 1 6 of t his prospe c t us be fore de c iding
w he t he r t o pa rt ic ipa t e in t he Ex c ha nge Offe r.
N e it he r t he Se c urit ie s a nd Ex c ha nge Com m ission, w hic h w e re fe r t o he re in a s t he SEC, nor a ny st a t e se c urit ie s
c om m ission ha s a pprove d or disa pprove d of t he Ex c ha nge N ot e s or de t e rm ine d if t his prospe c t us is t rut hful or
c om ple t e . Any re pre se nt a t ion t o t he c ont ra ry is a c rim ina l offe nse .
T he da t e of t his prospe c t us is M a rc h 2 7 , 2 0 2 0 .
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Ra t he r t ha n re pe a t c e rt a in inform a t ion in t his prospe c t us t ha t w e ha ve a lre a dy inc lude d in re port s
file d w it h t he SEC, t his prospe c t us inc orpora t e s im port a nt busine ss a nd fina nc ia l inform a t ion a bout us t ha t
is not inc lude d in or de live re d w it h t his prospe c t us. We w ill provide t his inform a t ion t o you a t no c ha rge
upon w rit t e n or ora l re que st dire c t e d t o: Cle ve la nd -Cliffs I nc ., 2 0 0 Public Squa re , Suit e 3 3 0 0 , Cle ve la nd,
Ohio, At t e nt ion: I nve st or Re la t ions; T e le phone : (2 1 6 ) 6 9 4 -5 7 0 0 . I n orde r t o re c e ive t im e ly de live ry of a ny
re que st e d doc um e nt s in a dva nc e of t he Ex pira t ion Da t e , you should m a k e your re que st no la t e r t ha n April
1 7 , 2 0 2 0 , w hic h is five full busine ss da ys be fore you m ust m a k e a de c ision re ga rding t he Ex c ha nge Offe r.
T a ble of Cont e nt s

Pa ge
NOTICE TO INVESTORS
ii
WHERE YOU CAN FIND MORE INFORMATION
ii
INFORMATION WE INCORPORATE BY REFERENCE
ii
NON-GAAP FINANCIAL MEASURES
iii
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
iv
SUMMARY
1
RISK FACTORS
16
USE OF PROCEEDS
25
THE EXCHANGE OFFER
26
DESCRIPTION OF OTHER INDEBTEDNESS
32
DESCRIPTION OF THE NOTES
35
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
57
CERTAIN ERISA CONSIDERATIONS
58
PLAN OF DISTRIBUTION
60
LEGAL MATTERS
61
EXPERTS
61
N OT I CE T O I N V EST ORS
This prospectus may only be used where it is legal to make the Exchange Offer and by a broker-dealer for resales of
Exchange Notes acquired in the Exchange Offer where it is legal to do so.
This prospectus and the information incorporated by reference summarize documents and other information in a manner
we believe to be accurate, but we refer you to the actual documents for a more complete understanding of the information we
discuss in this prospectus and the information incorporated by reference. In deciding to exchange your Original Notes, you must
rely on your own examination of such documents, our business and the terms of the offering and the Exchange Notes, including
the merits and risks involved.
We make no representation to you that the Exchange Notes will be a legal investment for you. You should not consider
any information in this prospectus to be legal, business or tax advice. You should consult your own attorney, business advisor and
tax advisor for legal, business and tax advice regarding an investment in the Exchange Notes. Neither the delivery of the
prospectus nor any exchange made pursuant to this prospectus implies that any information set forth in or incorporated by
reference in this prospectus is correct as of any date after the date of this prospectus.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of Exchange Notes. The letter of transmittal accompanying this
prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original Notes where
the Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have
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agreed that, for a period ending on the date on which a broker-dealer is no longer required to deliver a prospectus in connection
with market-making or other trading activities, we will make this prospectus available to any broker-dealer for use in connection
with these resales. See "Plan of Distribution."
References in this prospectus to the terms "we," "us," "our," "the Company," or "Cliffs" or other similar terms mean
Cleveland-Cliffs Inc. and its consolidated subsidiaries unless we state otherwise or the context indicates otherwise. As used in this
prospectus, the term "long ton" means a long ton (equal to 2,240 pounds).
WH ERE Y OU CAN FI N D M ORE I N FORM AT I ON
We are subject to the informational reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act.
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available
over the Internet at the SEC's website at www.sec.gov.
We make available, free of charge, on our website at www.clevelandcliffs.com, our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports and statements as soon
as reasonably practicable after they are filed with the SEC. The information contained on or accessible through our website is not
part of this prospectus, other than the documents that we file with the SEC that are specifically incorporated by reference into this
prospectus.
I N FORM AT I ON WE I N CORPORAT E BY REFEREN CE
We are incorporating by reference certain information that each of Cliffs and AK Steel Holding Corporation, or AK Steel,
files or filed with the SEC, which means:
·
incorporated documents are considered part of this prospectus;
·
we can disclose important information to you by referring you to those documents; and
·
information that we file with the SEC after the date of this prospectus will automatically update and supersede the
information contained in this prospectus and incorporated filings.
ii
Cliffs
We incorporate by reference the documents listed below that Cliffs filed with the SEC under the Exchange Act:
·
Annual Report on Form 10-K for the year ended December 31, 2019 (filed with the SEC on February 20, 2020); and
·
Current Reports on Form 8-K filed with the SEC on February 26, 2020 (two reports), March 2, 2020, March 3, 2020,
March 10, 2020, March 13, 2020 and March 16, 2020.
AK St e e l
We incorporate by reference the following information that AK Steel (File No. 001-13696) filed with the SEC under the
Exchange Act:
·
Annual Report on Form 10-K for the year ended December 31, 2019 (filed with the SEC on February 20, 2020), as
amended by Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2019 (filed with
the SEC on March 10, 2020); and
·
Current Reports on Form 8-K filed with the SEC on January 29, 2020, March 3, 2020, March 10, 2020 and March 13,
2020.
We also incorporate by reference each of the documents that Cliffs files with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act on or after the date of this prospectus and until the completion of the Exchange Offer. We do not,
however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed "filed" with the SEC,
including any information furnished pursuant to Item 2.02 or Item 7.01 of our Current Reports on Form 8-K after the date of this
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prospectus unless, and except to the extent, specified in such Current Reports.
We will provide you with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically
incorporated by reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the
following address or telephone number:
Cleveland-Cliffs Inc.
200 Public Square, Suite 3300
Cleveland, Ohio 44114
Attention: Investor Relations
Telephone: 1-216-694-5700
N ON -GAAP FI N AN CI AL M EASU RES
We believe that the financial statements and the other financial data included in, or incorporated by reference into, this
prospectus have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in
the United States, or GAAP, and the regulations published by the SEC and are consistent with current practice with the exception
of the presentation of (i) with respect to Cliffs, earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA
excluding certain items such as extinguishment of debt, impacts of discontinued operations, foreign currency exchange
remeasurement, severance, impairment of other long-lived assets, acquisition costs and intersegment corporate allocations of
selling, general and administrative costs, or adjusted EBITDA, and cash cost of goods sold and operating expense rate per long ton
and (ii) with respect to AK Steel, adjusted EBITDA, adjusted EBITDA margin and adjusted net income attributable to AK Steel,
which are non-GAAP financial measures.
With respect to Cliffs, EBITDA, adjusted EBITDA and cash cost of goods sold and operating expense rate per long ton are
not measurements of financial performance or condition under GAAP and should not be considered as alternatives to net income,
operating income, or any other financial performance measure derived in accordance with GAAP. The presentation of these
measures is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared
and presented in accordance with GAAP.
iii
EBITDA and adjusted EBITDA are used by management, investors, lenders and other external users of our financial
statements to assess our operating performance and to compare operating performance to other companies in the iron ore industry.
In addition, management believes EBITDA and adjusted EBITDA are useful measures to assess the earnings power of our
business without the impact of capital structure and can be used to assess our ability to service debt and fund future capital
expenditures in the business. Cash cost of goods sold and operating expense rate per long ton is used by management in
evaluating operating performance. We believe our presentation of non-GAAP cash cost of goods sold and operating expense rate
per long ton is useful to investors because it excludes depreciation, depletion and amortization, which are non-cash, and freight,
which has no impact on sales margin, thus providing a more accurate view of the cash outflows related to the sale of iron ore.
These non-GAAP financial measures are not calculated in the same manner by all companies and, accordingly, are not
necessarily comparable to similarly titled measures of other companies and may not be appropriate measures for comparing
performance relative to other companies. While we believe that the presentation of the non-GAAP financial measures will enhance
an investor's understanding of our operating performance and performance compared to other producers and provide a more
accurate view of the cash outflows related to the sale of iron ore, the use of the non-GAAP financial measures as analytical tools
has limitations and you should not consider them in isolation, or as substitutes for an analysis of our results of operations as
reported in accordance with GAAP. For additional information about EBITDA, adjusted EBITDA and cash cost of goods sold and
operating expense rate per long ton, including reconciliations to the most directly comparable GAAP financial measures, see the
section titled "Summary--Summary Historical Consolidated Financial Data of Cliffs" of this prospectus.
With respect to AK Steel, adjusted EBITDA, adjusted EBITDA margin and adjusted net income attributable to AK Steel are
presented in this prospectus. This presentation excludes the effects of noncontrolling interests, costs associated with the closure of
Ashland Works, pension settlement charges and a credit for adjustment to a liability for transportation costs. AK Steel believes that
reporting adjusted net income attributable to AK Steel (as a total and on a per share basis) with these items excluded more clearly
reflects AK Steel's operating results for the periods presented and provides investors with a better understanding of AK Steel's
overall financial performance. Adjustments to net income attributable to AK Steel do not result in an income tax effect as any gross
income tax effects are offset by a corresponding change in the deferred income tax valuation allowance.
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With respect to AK Steel's presentation, EBITDA is an acronym for earnings before interest, taxes, depreciation and
amortization. It is a metric that is sometimes used to compare the results of different companies by removing the effects of different
factors that might otherwise make comparisons inaccurate or inappropriate. For purposes of this prospectus, AK Steel has made
the adjustments to EBITDA noted in the preceding paragraph. The adjusted results, although not financial measures under GAAP
and not identically applied by other companies, facilitate the ability to analyze AK Steel's financial results in relation to those of its
competitors and to its prior financial performance by excluding items that otherwise would distort the comparison. Adjusted EBITDA,
adjusted EBITDA margin and adjusted net income are not, however, intended as alternative measures of operating results or cash
flow from operations as determined in accordance with GAAP and are not necessarily comparable to similarly titled measures used
by other companies. You should not rely on adjusted EBITDA, adjusted EBITDA margin and adjusted net income as a substitute
for any GAAP financial measure. For additional information about adjusted EBITDA, adjusted EBITDA margin and adjusted net
income, including a calculation and reconciliation to the most directly comparable GAAP financial measures, see the section titled
"Summary--Summary Historical Consolidated Financial Data of AK Steel" of this prospectus.
We also present pro forma adjusted EBITDA, which reflects historical adjusted EBITDA as reported by Cliffs and AK Steel
and the pro forma adjustments reflecting the Merger (as defined herein), including certain expected synergies. For additional
information about pro forma adjusted EBITDA, including a calculation and reconciliation to pro forma net income, see the section
titled "Summary--Summary Unaudited Pro Forma Condensed Combined Financial Data" of this prospectus.
DI SCLOSU RE REGARDI N G FORWARD-LOOK I N G ST AT EM EN T S
This prospectus, including the documents incorporated by reference, contains, and any prospectus supplement may
contain, statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements may be identified by the use of predictive, future-tense or forward-looking terminology,
such as "believes," "anticipates," "expects," "estimates," "intends," "may," "will" or similar terms. These statements speak only as of
the date of this prospectus or the date of the document incorporated
iv
by reference, as applicable, and we undertake no ongoing obligation, other than that imposed by law, to update these statements.
These statements appear in a number of places in this prospectus, including the documents incorporated by reference, and relate
to, among other things, our intent, belief or current expectations of our directors or our officers with respect to: our future financial
condition; results of operations or prospects; estimates of our economic iron ore reserves; our business and growth strategies; and
our financing plans and forecasts. You are cautioned that any such forward-looking statements are not guarantees of future
performance and involve significant risks and uncertainties, and that actual results may differ materially from those contained in or
implied by the forward-looking statements as a result of various factors, some of which are unknown, including, without limitation:
·
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by
oversupply of imported products, reduced market demand and risks related to U.S. government actions with respect to
Section 232 of the Trade Expansion Act (as amended by the Trade Act of 1974), the United States-Mexico-Canada
Agreement and/or other trade agreements, treaties or policies;
·
continued volatility of iron ore and steel prices and other trends, which may impact the price-adjustment calculations
under our sales contracts;
·
our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace
clientele;
·
our ability to cost-effectively achieve planned production rates or levels, including at our hot briquetted iron, or HBI,
plant;
·
our ability to successfully identify and consummate any strategic investments or development projects, including our
HBI plant;
·
the impact of our blast furnace customers reducing their steel production due to increased market share of steel
produced using other methods or lighter-weight steel alternatives;
·
our actual economic iron ore reserves or reductions in current mineral estimates, including whether any mineralized
material qualifies as a reserve;
·
the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or
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service providers or any other litigation or arbitration;
·
problems or uncertainties with sales volume or mix, productivity, tons mined, transportation, mine-closure obligations,
environmental liabilities, employee-benefit costs and other risks of the mining industry;
·
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 maintain adequate liquidity, our level of indebtedness and the availability of capital could limit cash flow
available to fund working capital, planned capital expenditures, acquisitions and other general corporate purposes or
ongoing needs of our business;
·
our ability to continue to pay cash dividends, and the amount and timing of any cash dividends;
·
our ability to maintain appropriate relations with unions and employees;
·
the ability of our customers, joint venture partners and third-party service providers to meet their obligations to us on a
timely basis or at all;
·
events or circumstances that could impair or adversely impact the viability of a mine or production plant and the
carrying value of associated assets, as well as any resulting impairment charges;
·
uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price
of energy, equipment failures and other unexpected events;
·
unpredictability and severity of catastrophic events, including acts of terrorism or outbreak of war or hostilities or public
health crises, as well as management's response to any of the aforementioned factors;
v
·
adverse changes in interest rates and tax laws;
·
the potential existence of significant deficiencies or material weakness in our internal control over financial reporting;
·
our ability to realize the anticipated benefits of the Merger and to successfully integrate the businesses of AK Steel into
our existing businesses, including uncertainties associated with maintaining relationships with customers, vendors and
employees, as well as realizing the estimated future synergies;
·
the possibility that the Merger may be less accretive than expected, and may be dilutive, to our earnings per share,
whether as a result of adverse changes in market conditions, volatility in the commodity prices for iron ore and/or steel,
adverse regulatory developments or otherwise;
·
additional debt we assume or issue in connection with the Merger may negatively impact our credit profile and limit our
financial flexibility; and
·
other risks described in our reports filed with the SEC and in AK Steel's Annual Report on Form 10-K for the year
ended December 31, 2019, and in the "Risk Factors" section of this prospectus.
These factors and the other risk factors described in this prospectus, including the documents incorporated by reference,
are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no
assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will
have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements.
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SU M M ARY
This summary highlights information about us, the Exchange Offer and the Exchange Notes. This summary is not
complete and may not contain all of the information that you should consider prior to deciding whether to participate in the
Exchange Offer. For a more complete understanding of us, we encourage you to read this prospectus, including the
information incorporated by reference into this prospectus and the other documents to which we have expressly referred you.
In particular, we encourage you to read the historical financial statements, and the related notes, incorporated by reference
into this prospectus. Investing in the Exchange Notes involves significant risks, as described in the "Risk Factors" section.
Our Com pa ny
Founded in 1847, Cliffs is among the largest vertically integrated producers of differentiated iron ore and steel in
North America. With an emphasis on non-commoditized products, we are uniquely positioned to supply both customized iron
ore pellets and sophisticated steel solutions to a quality-focused customer base, with an industry-leading market share in the
automotive industry. A commitment to environmental sustainability is core to our business operations and extends to how we
partner with stakeholders across our communities and the steel value chain. Headquartered in Cleveland, Ohio, Cliffs
employs approximately 12,000 people across mining and steel manufacturing operations in the United States, Canada and
Mexico.
Re c e nt De ve lopm e nt s
T he M e rge r
Pursuant to the Agreement and Plan of Merger, dated as of December 2, 2019, or the Merger Agreement, among
Cliffs, AK Steel and Pepper Merger Sub Inc., a direct, wholly owned subsidiary of Cliffs, or Merger Sub, on March 13, 2020,
Merger Sub merged with and into AK Steel, which we refer to as the Merger, with AK Steel continuing as the surviving
corporation and becoming a direct, wholly owned subsidiary of Cliffs. As a result of the Merger, each share of AK Steel
common stock issued and outstanding immediately prior to the effective time of the Merger (other than certain excluded
shares) was converted into the right to receive 0.400 Cliffs common shares and, if applicable, cash in lieu of any fractional
Cliffs common shares. The Merger Agreement and the transactions contemplated thereby, including the issuance of Cliffs
common shares in connection with the Merger, were approved by the shareholders of Cliffs and the Merger Agreement was
adopted by AK Steel stockholders at respective special meetings held on March 10, 2020.
De bt Ex c ha nge Offe rs a nd Conse nt Solic it a t ions
On January 14, 2020, and in connection with the Merger, we commenced exchange offers, or the Debt Exchange
Offers, (i) for any and all outstanding 6.375% senior notes due 2025, or the AK Steel 2025 Notes, issued by AK Steel
Corporation, a wholly owned subsidiary of AK Steel, for the same aggregate principal amount of new notes issued by Cliffs
having the same maturity and interest rate as the AK Steel 2025 Notes, which we refer to as the New Cliffs 2025 Notes, and
(ii) for any and all outstanding 7.00% senior notes due 2027 issued by AK Steel Corporation, or the AK Steel 2027 Notes, for
the same aggregate principal amount of new notes issued by Cliffs having the same maturity and interest rate as the AK
Steel 2027 Notes, which we refer to as the New Cliffs 2027 Notes. Concurrently, AK Steel Corporation commenced consent
solicitations, or the First Consent Solicitations, from the holders of the AK Steel 2025 Notes and AK Steel 2027 Notes to
eliminate certain of the covenants, restrictive provisions and events of default from the indentures governing such notes, or
the First Consent Solicitation Amendments. On January 29, 2020, we and AK Steel announced that the requisite consents
had been received and AK Steel Corporation entered into supplemental indentures to effect the First Consent Solicitation
Amendments, which became operative following the satisfaction of all of the closing conditions to the Debt Exchange Offers
and First Consent Solicitations, including consummation of the Merger, on March 13, 2020.
In connection with the completion of the Debt Exchange Offers, on March 16, 2020, we issued $231.8 million
aggregate principal amount of New Cliffs 2025 Notes and $335.4 million aggregate principal amount of New Cliffs 2027 Notes
in exchange for the same aggregate principal amount of AK Steel 2025 Notes and AK Steel 2027 Notes, respectively,
representing all of the AK Steel 2025 Notes and AK Steel 2027 Notes that had been validly tendered in the Debt Exchange
Offers and not validly withdrawn as of 6:00 a.m., New York City time, on March 13, 2020, the expiration time for the Debt
Exchange Offers.
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T e nde r Offe rs a nd Conse nt Solic it a t ions
On February 26, 2020, and in connection with the Merger, we commenced cash tender offers, or the Tender Offers,
for any and all outstanding 7.625% senior notes due 2021, or the AK Steel 2021 Notes, and 7.50% senior secured notes due
2023, or the AK Steel 2023 Notes, issued by AK Steel Corporation. Concurrently with the Tender Offers, AK Steel
Corporation commenced consent solicitations, or the Second Consent Solicitations, from the holders of the AK Steel 2021
Notes and AK Steel 2023 Notes to eliminate certain of the restrictive covenants and events of default from the indentures
governing such notes, to shorten the period of notice required in connection with a call of the AK Steel 2021 Notes and AK
Steel 2023 Notes for redemption and, with respect to the AK Steel 2023 Notes, to release the liens securing the AK Steel
2023 Notes, or the Second Consent Solicitation Amendments. On March 10, 2020, we and AK Steel announced that the
requisite consents had been received and AK Steel Corporation entered into supplemental indentures to effect the Second
Consent Solicitation Amendments, which became operative following the satisfaction of all of the closing conditions to the
Second Consent Solicitations, including consummation of the Merger and the closing of the Secured Notes Offering (as
defined below), on March 13, 2020.
In connection with the early settlement of the Tender Offers, on March 13, 2020, we purchased $364.2 million
aggregate principal amount of AK Steel 2021 Notes and $310.7 million aggregate principal amount of AK Steel 2023 Notes,
representing all of the AK Steel 2021 Notes and AK Steel 2023 Notes that had been validly tendered in the Tender Offers
and not validly withdrawn as of 5:00 p.m., New York City time, on March 10, 2020, or the Tender Offer Early Participation
Deadline, using a portion of the net proceeds of the Secured Notes Offering. The Tender Offers are scheduled to expire at
12:01 a.m., New York City time, on March 25, 2020, unless such date is extended.
This prospectus is not intended to and does not constitute an offer to sell or purchase, or the solicitation of an offer
to sell or purchase, or the solicitation of any vote of approval or the solicitation of tenders or consents with respect to any
security, other than the Exchange Notes. No offer, solicitation, purchase or sale will be made in any jurisdiction in which
such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of
the Securities Act. In the case of the Tender Offers, the Tender Offers are being made solely pursuant to the offer to
purchase and consent solicitation statement, dated February 26, 2020, as amended to date, and only to such persons and in
such jurisdictions as is permitted under applicable law.
Ot he r Fina nc ing
On March 13, 2020, and in connection with the consummation of the Merger, Cliffs issued $725.0 million aggregate
principal amount of 6.75% senior secured notes due 2026, or the New Secured Notes, in an offering, or the Secured Notes
Offering, that was exempt from the registration requirements of the Securities Act. We used a portion of the net proceeds
from the Secured Notes Offering to repurchase all of the AK Steel 2021 Notes and the AK Steel 2023 Notes that were validly
tendered in the Tender Offers and not validly withdrawn as of the Tender Offer Early Participation Deadline. We intend to
use the remainder of the net proceeds from the Secured Notes Offering to pay for fees and expenses in connection with the
Merger and the Secured Notes Offering and for general corporate purposes.
Additionally, on March 13, 2020, in connection with the consummation of the Merger, we entered into a new asset-
based revolving credit facility, or the New ABL Facility, to replace and refinance Cliffs' existing asset-based revolving credit
facility and AK Steel Corporation's existing asset-based revolving credit facility.
Our St ruc t ure
The following diagram illustrates Cliffs' organizational structure after giving effect to the consummation of the Merger
and the related financing transactions. This diagram is provided for illustrative purposes only and does not show all legal
entities or obligations of such entities.
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(1)
Issuer of existing secured and unsecured senior notes issued by Cliffs, including the Original Notes, borrower under
the New ABL Facility and future issuer of the Exchange Notes. Cliffs' 6.25% senior notes due 2040 and 1.50%
convertible senior notes due 2025 are unsecured and are not guaranteed by any of Cliffs' subsidiaries. Cliffs' 4.875%
senior secured notes due 2024, Cliffs' 5.75% senior notes due 2025, the New Cliffs 2025 Notes, the New Cliffs 2027
Notes, the New Secured Notes and the Original Notes are, and the Exchange Notes will be, guaranteed on a senior
basis by each of Cliffs' material direct and indirect wholly owned domestic subsidiaries, subject to certain exceptions.
The New ABL Facility is guaranteed by Cliffs' material direct and indirect wholly owned domestic subsidiaries,
subject to certain exceptions. See "Description of Other Indebtedness."
(2)
Immaterial subsidiaries are limited to Cliffs' direct and indirect subsidiaries that do not have consolidated total assets
or consolidated total revenues in excess of 3.0% of the consolidated total assets or consolidated total revenues of
Cliffs and its subsidiaries as of the most recent balance sheet date or for the most recent four-quarter period,
respectively, provided that all immaterial subsidiaries taken together may not have consolidated total assets or
consolidated total revenues in excess of 7.5% of the consolidated total assets or consolidated total revenues,
respectively, of Cliffs and its subsidiaries. Immaterial subsidiaries do not guarantee any of Cliffs' existing senior
notes, including the Original Notes, or the New ABL Facility and will not guarantee the Exchange Notes.
(3)
Other non-guarantor subsidiaries are limited to (a) Cliffs' non-wholly owned subsidiaries to the extent the
organizational documents (e.g., joint venture or shareholder agreements) of such subsidiaries prohibit such
guarantee and (b) Cliffs' indirect subsidiary, Wabush Iron Co. Limited.
(4)
Cliffs' foreign subsidiaries do not guarantee any of Cliffs' existing senior notes, including the Original Notes, or the
New ABL Facility and will not guarantee the Exchange Notes. Cliffs' main holding company for these foreign
subsidiaries, Cleveland-Cliffs International Holding Company, will also not provide a guarantee so long as
substantially all of its assets consist of equity interests in one or more foreign subsidiaries. Also, any pledge of
Cleveland-Cliffs International Holding Company voting stock will be limited to 65% of the voting equity interests in
Cleveland-Cliffs International Holding Company.
(5)
AK Steel, AK Steel Corporation and the following subsidiaries of AK Steel Corporation are guarantors of Cliffs'
4.875% senior secured notes due 2024, Cliffs' 5.75% senior notes due 2025, the New Cliffs 2025 Notes, the New
Cliffs 2027 Notes, the New Secured Notes, the Original Notes and the New ABL Facility, and all will guarantee the
Exchange Notes: AH Management, Inc., AKS Investments, Inc., AK Steel Properties, Inc., AK Tube LLC, Mountain
State Carbon, LLC, PPHC Holdings, LLC, and SNA Carbon, LLC. For summarized financial information regarding AK
Steel, AK Steel Corporation and certain other AK Steel Corporation subsidiaries that will guarantee the Exchange
Notes, see Note 21 - Supplementary Guarantor Information
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within Item 8. Financial Statements and Supplementary Data in AK Steel's Annual Report on Form 10-K for the year
ended December 31, 2019, which is incorporated by reference herein. AK Steel, AK Steel Corporation and certain
other AK Steel Corporation subsidiaries that will be guarantors of the Exchange Notes are included within the
following columns contained in the condensed consolidating financial statements contained in Note 21: "AK Holding,"
which contains financial information about AK Steel, "AK Steel," which contains financial information about AK Steel
Corporation, and "Guarantor Subsidiaries," which contains aggregated financial information about AK Steel
Properties, Inc., AK Tube LLC and Mountain State Carbon, LLC. Financial information about PPHC Holdings, LLC,
AH Management, Inc., AKS Investments, Inc. and SNA Carbon LLC, which are not or were not, as applicable,
guarantors of AK Steel Corporation's outstanding and previously outstanding senior notes but that will be guarantors
of the Exchange Notes, was historically included within the "Other Non-Guarantor Subsidiaries" column in the
condensed consolidating financial statements contained in Note 21.
(6)
Issuer of the AK Steel 2021 Notes and the AK Steel 2023 Notes, guarantor of Cliffs' 4.875% senior secured notes
due 2024, Cliffs' 5.75% senior notes due 2025, the New Cliffs 2025 Notes, the New Cliffs 2027 Notes, the New
Secured Notes, the Original Notes and the New ABL Facility and future guarantor of the Exchange Notes.
Corpora t e I nform a t ion
Our principal executive offices are located at 200 Public Square, Suite 3300, Cleveland, Ohio 44114-2315. Our main
telephone number is (216) 694-5700, and our website address is www.clevelandcliffs.com. The information contained on or
accessible through our website is not part of this prospectus, other than the documents that we file with the SEC that are
specifically incorporated by reference into this prospectus.
4
T he Ex c ha nge Offe r
The following summary contains basic information about the Exchange Offer and is not intended to be complete. It does
not contain all the information that may be important to you. For a more complete understanding of the Exchange Offer,
including for the meanings of capitalized terms not otherwise defined below, please refer to "The Exchange Offer."
The
We are offering to exchange up to $750.0 million aggregate principal amount of our registered
Exchange
5.875% Senior Guaranteed Notes due 2027, which we refer to herein as the Exchange Notes, for an
Offer
equal principal amount of our outstanding restricted 5.875% Senior Guaranteed Notes due 2027
issued in a private transaction exempt from the registration requirements of the Securities Act on
May 13, 2019, which we refer to herein as the Original Notes. We refer herein to the Original Notes
and the Exchange Notes, collectively, as the Notes. We refer herein to the offer to exchange as the
Exchange Offer. The terms of the Exchange Notes will be substantially identical to the terms of the
Original Notes, except that the Exchange Notes will be registered under the Securities Act and the
transfer restrictions and registration rights and related additional interest provisions applicable to the
Original Notes will not apply to the Exchange Notes. The Exchange Notes will be part of the same
series as the Original Notes and will be issued under the same indenture. Holders of Original Notes
do not have any appraisal or dissenters' rights in connection with the Exchange Offer.
Purpose of The Exchange Notes are being offered to satisfy our obligations under the registration rights
the
agreement entered into at the time we issued and sold the Original Notes.
Exchange
Offer
Expiration
The Exchange Offer will expire at 5:00 p.m., New York City time, on April 24, 2020 or on a later
Date;
date and time to which we extend it. We refer to such time and date as the Expiration Date. Tenders
Withdrawal of Original Notes in the Exchange Offer may be withdrawn at any time prior to the Expiration Date.
of Tenders; We will exchange the Exchange Notes for validly tendered Original Notes promptly following the
Return of
Expiration Date. We refer to such date of exchange as the Exchange Date. Any Original Notes that
Original
are not accepted for exchange for any reason will be returned by us, at our expense, to the
Notes Not tendering holder promptly after the expiration or termination of the Exchange Offer.
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