| DEBT AND CREDIT FACILITIES |
NOTE 7 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
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| (In millions) |
| Debt Instrument |
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Issuer1
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Annual Effective
Interest Rate |
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March 31,
2023 |
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December 31,
2022 |
| Senior Secured Notes: |
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6.750% 2026 Senior Secured Notes |
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Cliffs |
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6.99% |
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$ |
829Ìý
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$ |
829Ìý |
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| Senior Unsecured Notes: |
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7.000% 2027 Senior Notes |
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Cliffs |
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9.24% |
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73Ìý
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73Ìý |
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7.000% 2027 AK Senior Notes |
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AK Steel |
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9.24% |
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56Ìý
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56Ìý |
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5.875% 2027 Senior Notes |
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Cliffs |
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6.49% |
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556Ìý
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556Ìý |
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4.625% 2029 Senior Notes |
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Cliffs |
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4.63% |
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368Ìý
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368Ìý |
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4.875% 2031 Senior Notes |
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Cliffs |
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4.88% |
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325Ìý
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325Ìý |
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6.250% 2040 Senior Notes |
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Cliffs |
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6.34% |
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235Ìý
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235Ìý |
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| ABL Facility |
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Cliffs2
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Variable3
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2,171Ìý
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1,864Ìý |
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| Total principal amount |
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4,613Ìý
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4,306Ìý |
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| Unamortized discounts and issuance costs |
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(54) |
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(57) |
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| Total long-term debt |
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$ |
4,559Ìý
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$ |
4,249Ìý |
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1 Unless otherwise noted, references in this column and throughout this NOTE 7 - 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).
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2 Refers to ÐÇ¿Õ´«Ã½ Inc. as borrower under our ABL Facility.
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3 Our ABL Facility annual effective interest rate was 6.40% and 5.60%, respectively, as of MarchÌý31, 2023 and DecemberÌý31, 2022.
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Subsequent to the quarter ended March 31, 2023, we issued $750Ìýmillion aggregate principal amount of 6.750% 2030 Senior Notes. We used the net proceeds from the offering to repay a portion of the borrowings under our ABL Facility. Refer to NOTE 18 - SUBSEQUENT EVENTS for further information.
ABL FACILITY
As of MarchÌý31, 2023, we were in compliance with the ABL Facility liquidity requirements and, therefore, the springing financial covenant requiring a minimum fixed charge coverage ratio of 1.0 to 1.0 was not applicable.
The following represents a summary of our borrowing capacity under the ABL Facility:
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March 31,
2023 |
Available borrowing base on ABL Facility1
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$ |
4,500Ìý
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| Borrowings |
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(2,171) |
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Letter of credit obligations2
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(147) |
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| Borrowing capacity available |
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$ |
2,182Ìý
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1 As of MarchÌý31, 2023, the ABL Facility has a maximum available borrowing base of $4.5 billion. The borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
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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 and environmental obligations.
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DEBT MATURITIES
The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at MarchÌý31, 2023 (in millions):
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| 2023 |
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2024 |
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2025 |
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2026 |
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2027 |
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Thereafter |
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Total |
| $ |
—Ìý |
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$ |
—Ìý |
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$ |
2,171Ìý |
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$ |
829Ìý |
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$ |
685Ìý |
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$ |
928Ìý |
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$ |
4,613Ìý |
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