ÐÇ¿Õ´«Ã½

Quarterly report pursuant to Section 13 or 15(d)

DEBT AND CREDIT FACILITIES

v3.21.2
DEBT AND CREDIT FACILITIES
6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract] Ìý
DEBT AND CREDIT FACILITIES
NOTE 8 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
(In Millions)
June 30, 2021
Debt Instrument
Issuer1
Annual Effective
Interest Rate
Total Principal Amount Unamortized
Debt Issuance Costs
Unamortized Premiums (Discounts) Total Debt
Senior Secured Notes:
9.875% 2025 Senior Secured Notes
Cliffs 10.57% $ 607Ìý $ (4) $ (15) $ 588Ìý
6.75% 2026 Senior Secured Notes
Cliffs 6.99% 845Ìý (18) (8) 819Ìý
Senior Unsecured Notes:
1.50% 2025 Convertible Senior Notes
Cliffs 6.26% 296Ìý (3) (45) 248Ìý
7.00% 2027 Senior Notes
Cliffs 9.24% 73Ìý —Ìý (7) 66Ìý
7.00% 2027 AK Senior Notes
AK Steel 9.24% 56Ìý —Ìý (5) 51Ìý
5.875% 2027 Senior Notes
Cliffs 6.49% 556Ìý (4) (17) 535Ìý
4.625% 2029 Senior Notes
Cliffs 4.63% 500Ìý (8) —Ìý 492Ìý
4.875% 2031 Senior Notes
Cliffs 4.88% 500Ìý (9) —Ìý 491Ìý
6.25% 2040 Senior Notes
Cliffs 6.34% 263Ìý (2) (3) 258Ìý
IRBs due 2024 to 2028 AK Steel Various 92Ìý —Ìý 2Ìý 94Ìý
EDC Revolving Facilities3
* Various 80Ìý —Ìý —Ìý 56Ìý
ABL Facility3
Cliffs2
2.24% 3,500Ìý —Ìý —Ìý 1,670Ìý
Total long-term debt $ 5,368Ìý
* Our subsidiaries, Fleetwood Metal Industries Inc. and The Electromac Group Inc., are the borrowers under the EDC Revolving Facilities.
1 Unless otherwise noted, references in this column and throughout this NOTE 8 - DEBT AND CREDIT FACILITIES to "Cliffs" are to ÐÇ¿Õ´«Ã½ Inc., and references to "AK Steel" are to AK Steel Corporation (n/k/a ÐÇ¿Õ´«Ã½ Steel Corporation).
2 Refers to ÐÇ¿Õ´«Ã½ Inc. as borrower under our ABL Facility.
3 The total principal amounts for the indicated credit facilities are stated at their respective maximum borrowing capacities.
(In Millions)
December 31, 2020
Debt Instrument
Issuer1
Annual Effective
Interest Rate
Total Principal Amount Unamortized
Debt Issuance Costs
Unamortized
Premiums
(Discounts)
Total Debt
Senior Secured Notes:
4.875% 2024 Senior Notes
Cliffs 5.00% $ 395Ìý $ (3) $ (1) $ 391Ìý
9.875% 2025 Senior Secured Notes
Cliffs 10.57% 955Ìý (8) (25) 922Ìý
6.75% 2026 Senior Secured Notes
Cliffs 6.99% 845Ìý (20) (9) 816Ìý
Senior Unsecured Notes:
7.625% 2021 AK Senior Notes
AK Steel 7.33% 34Ìý —Ìý —Ìý 34Ìý
7.50% 2023 AK Senior Notes
AK Steel 6.17% 13Ìý —Ìý —Ìý 13Ìý
6.375% 2025 Senior Notes
Cliffs 8.11% 64Ìý —Ìý (4) 60Ìý
6.375% 2025 AK Senior Notes
AK Steel 8.11% 29Ìý —Ìý (2) 27Ìý
1.50% 2025 Convertible Senior Notes
Cliffs 6.26% 296Ìý (4) (49) 243Ìý
5.75% 2025 Senior Notes
Cliffs 6.01% 396Ìý (3) (4) 389Ìý
7.00% 2027 Senior Notes
Cliffs 9.24% 73Ìý —Ìý (8) 65Ìý
7.00% 2027 AK Senior Notes
AK Steel 9.24% 56Ìý —Ìý (6) 50Ìý
5.875% 2027 Senior Notes
Cliffs 6.49% 556Ìý (4) (18) 534Ìý
6.25% 2040 Senior Notes
Cliffs 6.34% 263Ìý (2) (3) 258Ìý
IRBs due 2024 to 2028 AK Steel Various 92Ìý —Ìý 2Ìý 94Ìý
EDC Revolving Facility3
* 3.25% 40Ìý —Ìý —Ìý 18Ìý
ABL Facility3
Cliffs2
2.15% 3,500Ìý —Ìý —Ìý 1,510Ìý
Total debt 5,424Ìý
Less: current debt 34Ìý
Total long-term debt $ 5,390Ìý
* Our subsidiaries, Fleetwood Metal Industries Inc. and The Electromac Group Inc., are the borrowers under the EDC Revolving Facility.
1 Unless otherwise noted, references in this column and throughout this NOTE 8 - DEBT AND CREDIT FACILITIES to "Cliffs" are to ÐÇ¿Õ´«Ã½ Inc., and references to "AK Steel" are to AK Steel Corporation (n/k/a ÐÇ¿Õ´«Ã½ Steel Corporation).
2 Refers to ÐÇ¿Õ´«Ã½ Inc. as borrower under our ABL Facility.
3 The total principal amounts for the indicated credit facilities are stated at their respective maximum borrowing capacities.
Debt Extinguishments - 2021
On June 28, 2021, we redeemed all of the $396 million aggregate principal amount outstanding of the 5.75% 2025 Senior Notes using available liquidity. During the second quarter of 2021, we also repurchased $25 million aggregate principal amount of 9.875% 2025 Senior Secured Notes.
On March 11, 2021, we purchased an aggregate principal amount of $322Ìýmillion of the 9.875% 2025 Senior Secured Notes using the net proceeds from the February 11, 2021 issuance of 20Ìýmillion common shares and cash on hand. On March 12, 2021, we fully redeemed the 4.875% 2024 Senior Secured Notes, 7.625% 2021 AK Senior Notes, 7.50% 2023 AK Senior Notes, 6.375% 2025 Senior Notes and 6.375% 2025 AK Senior Notes, which totaled an aggregate principal amount of $535Ìýmillion.
The following is a summary of the debt extinguished and the respective impact on extinguishment:
(In Millions)
Three Months Ended
June 30, 2021
Six Months Ended
June 30, 2021
Debt Instrument
Debt Extinguished
(Loss) on Extinguishment Debt Extinguished (Loss) on Extinguishment
9.875% 2025 Senior Secured Notes
$ 25Ìý $ (5) $ 347Ìý $ (47)
4.875% 2024 Senior Secured Notes
—Ìý —Ìý 395Ìý (14)
7.625% 2021 AK Senior Notes
—Ìý —Ìý 34Ìý —Ìý
7.50% 2023 AK Senior Notes
—Ìý —Ìý 13Ìý —Ìý
6.375% 2025 Senior Notes
—Ìý —Ìý 64Ìý (7)
6.375% 2025 AK Senior Notes
—Ìý —Ìý 29Ìý (3)
5.75% 2025 Senior Notes
396Ìý (17) 396Ìý (17)
$ 421Ìý $ (22) $ 1,278Ìý $ (88)
Debt Extinguishments - 2020
On April 24, 2020, we used the net proceeds from the offering of the additional 9.875% 2025 Senior Secured Notes to repurchase $736Ìýmillion aggregate principal amount of our outstanding senior notes of various series, which resulted in debt reduction of $181Ìýmillion. During the second quarter of 2020, we also repurchased an additional $12Ìýmillion aggregate principal amount of our outstanding senior notes of various series with cash on hand. On June 1, 2020, we redeemed $7Ìýmillion aggregate principal amount of our outstanding 2020 IRBs.
On March 13, 2020, in connection with the AK Steel Merger, we purchased $364 million aggregate principal amount of 7.625% 2021 AK Senior Notes and $311 million aggregate principal amount of 7.50% 2023 AK Senior Notes upon early settlement of tender offers made by Cliffs. The net proceeds from the offering of 6.75% 2026 Senior Secured Notes, along with a portion of the ABL Facility borrowings, were used to fund such purchases. As the 7.625% 2021 AK Senior Notes and 7.50% 2023 AK Senior Notes were recorded at fair value just prior to being purchased, there was no gain or loss on extinguishment. Additionally, in connection with the final settlement of the tender offers, we purchased $9 million aggregate principal amount of the 7.625% 2021 AK Senior Notes and $57 million aggregate principal amount of the 7.50% 2023 AK Senior Notes with cash on hand.
The following is a summary of the debt extinguished and the respective impact on extinguishment:
(In Millions)
Three Months Ended
June 30, 2020
Six Months Ended
June 30, 2020
Debt Instrument Debt Extinguished Gain on Extinguishment Debt Extinguished Gain on Extinguishment
7.625% 2021 AK Senior Notes
$ —Ìý $ —Ìý $ 373Ìý $ —Ìý
7.50% 2023 AK Senior Notes
—Ìý —Ìý 367Ìý 3Ìý
4.875% 2024 Senior Secured Notes
6Ìý 1Ìý 6Ìý 1Ìý
6.375% 2025 Senior Notes
168Ìý 21Ìý 168Ìý 21Ìý
1.50% 2025 Convertible Senior Notes
20Ìý 1Ìý 20Ìý 1Ìý
5.75% 2025 Senior Notes
77Ìý 16Ìý 77Ìý 16Ìý
7.00% 2027 Senior Notes
247Ìý 29Ìý 247Ìý 29Ìý
5.875% 2027 Senior Notes
194Ìý 49Ìý 194Ìý 49Ìý
6.25% 2040 Senior Notes
36Ìý 13Ìý 36Ìý 13Ìý
$ 748Ìý $ 130Ìý $ 1,488Ìý $ 133Ìý
ABL Facility
As of JuneÌý30, 2021, we were in compliance with the ABL Facility liquidity requirements and, therefore, the springing financial covenant requiring a minimum fixed charge coverage ratio of 1.0 to 1.0 was not applicable.
The following represents a summary of our borrowing capacity under the ABL Facility:
(In Millions)
June 30,
2021
Available borrowing base on ABL Facility1
$ 3,500Ìý
Borrowings (1,670)
Letter of credit obligations2
(235)
Borrowing capacity available $ 1,595Ìý
1 As of JuneÌý30, 2021, the ABL Facility has a maximum borrowing base of $3.5 billion. The available borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
2 We issued standby letters of credit with certain financial institutions in order to support business obligations including, but not limited to, workers' compensation, employee severance, insurance, operating agreements, IRBs and environmental obligations.
Debt Maturities
The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at JuneÌý30, 2021:
(In Millions)
Maturities of Debt
2021 (remaining period of year) $ —Ìý
2022 —Ìý
2023 56Ìý
2024 62Ìý
2025 2,573Ìý
Thereafter 2,823Ìý
Total maturities of debt $ 5,514Ìý