Pricing Term Sheet
Issuer Free Writing Prospectus
Dated December 5, 2017
Filed Pursuant to Rule 433
Registration Statement No. 333-215980
Supplementing the Preliminary
Prospectus Supplement dated December 4, 2017
(To Prospectus dated February 9, 2017)
Cleveland-Cliffs Inc., an Ohio corporation.
Ticker / Exchange for Common Shares:
CLF / The New York Stock Exchange (“NYSE”).
1.50% Convertible Senior Notes due 2025 (the “Convertible Notes”).
Aggregate Principal Amount Offered:
$275,000,000 aggregate principal amount of Convertible Notes (or $316,250,000 aggregate principal amount if the underwriters’ over-allotment option to purchase up to an additional $41,250,000 principal amount of Convertible Notes is exercised in full).
January 15, 2025, unless earlier repurchased, redeemed or converted.
1.50% per annum, accruing from the Settlement Date.
Interest Payment Dates:
January 15 and July 15 of each year, beginning on July 15, 2018.
Initial Price to the Public:
100% of the principal amount of the Convertible Notes plus accrued interest, if any, from the Settlement Date.
December 6, 2017.
December 19, 2017.
It is expected that delivery of the Convertible Notes will be made against payment therefor on or about December 19, 2017, which is the 9th business day following the Trade Date (such settlement cycle being referred to as “T +9”). Under Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle in two business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Convertible Notes on the Trade Date or the next six succeeding business days will be required, by virtue of the fact that the Convertible Notes initially will settle in T+9, to specify an alternative settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the Convertible Notes who wish to trade the Convertible Notes prior to the Settlement Date should consult their own advisors.
NYSE Last Reported Sale Price on December 5, 2017:
$6.05 per common share of the Issuer.
Approximately 35% above the NYSE Last Reported Sale Price on December 5, 2017.
Initial Conversion Price:
Approximately $8.17 per common share of the Issuer.
Initial Conversion Rate:
122.4365 common shares of the Issuer per $1,000 principal amount of Convertible Notes.
The Issuer may not redeem the Convertible Notes prior to January 15, 2022. The Issuer may redeem all or any portion of the Convertible Notes for cash at its option on or after January 15, 2022 if the last reported sale price of the Issuer’s common shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30-consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Issuer provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See “Description of the Convertible Notes-Optional Redemption” in the Preliminary Prospectus Supplement.
Use of Proceeds:
The Issuer estimates that the net proceeds from the Offering will be approximately $267.4 million (or $307.6 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discounts and commissions.
The Issuer intends to use the net proceeds from the Offering, along with the net proceeds from its concurrent secured notes offering, to finance a substantial portion of its HBI capital project and for general corporate purposes. See “Use of Proceeds” in the Preliminary Prospectus Supplement.
Initial Price to the Public, Underwriting Discount and Proceeds:
The following table shows the Initial Price to the Public, underwriting discounts and commissions and proceeds before expenses to the Issuer in the Offering:
Initial price to the public(1)
Underwriting discounts and commissions
Proceeds, before expenses, to the Issuer
(1)Plus accrued interest, if any, from the Settlement Date.
Joint Book-Running Managers:
Merrill Lynch, Pierce, Fenner & Smith
Goldman Sachs & Co. LLC
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
PNC Capital Markets LLC
Citizens Capital Markets, Inc.
Regions Securities LLC
The Huntington Investment Company
B. Riley FBR, Inc.
Increase in Conversion Rate Upon Conversion Upon a Make-Whole Fundamental Change or Notice of Redemption:
If (i) (a) the “effective date” (as defined in the Preliminary Prospectus Supplement) of a “make-whole fundamental change” (as defined in the Preliminary Prospectus Supplement) occurs prior to the maturity date of the Convertible Notes or (b) the Issuer issues a notice of redemption as provided under “Description of the Convertible Notes-Optional Redemption” in the Preliminary Prospectus Supplement and (ii) a holder elects to convert its Convertible Notes in connection with such make-whole fundamental change or notice of redemption, as applicable, the Issuer will, under certain circumstances, increase the conversion rate for the Convertible Notes so surrendered for conversion by a number of additional common shares of the Issuer, as described under “Description of the Convertible Notes-Conversion Rights-Increase in Conversion Rate Upon Conversion Upon a Make-Whole Fundamental Change or Notice of Redemption” in the Preliminary Prospectus Supplement.
The following table sets forth the number of additional shares by which the conversion rate will be increased per $1,000 principal amount of Convertible Notes for conversions in connection with a make-whole fundamental change or notice of redemption for each share price and effective date set forth below:
December 19, 2017
January 15, 2019
January 15, 2020
January 15, 2021
January 15, 2022
January 15, 2023
January 15, 2024
January 15, 2025
If the share price is between two share prices in the table above or the effective date is between two effective dates in the table above, the number of additional shares by which the conversion rate will be increased will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower share prices and the earlier and later effective dates, as applicable, based on a 365-day year.
If the share price is greater than $30.00 per share (subject to adjustment in the same manner as the share prices set forth in the column headings of the table above as described in the Preliminary Prospectus Supplement), no additional shares will be added to the conversion rate.
If the share price is less than $6.05 per share (subject to adjustment in the same manner as the share prices set forth in the column headings of the table above as described in the Preliminary Prospectus Supplement), no additional shares will be added to the conversion rate.