Quarterly report pursuant to Section 13 or 15(d)

DEBT AND CREDIT FACILITIES (Notes)

v3.20.2
DEBT AND CREDIT FACILITIES (Notes)
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
DEBT AND CREDIT FACILITIES The following represents a summary of our long-term debt:
(In Millions)
September 30, 2020
Debt Instrument
Issuer1
Annual Effective
Interest Rate
 Total Principal Amount Debt Issuance Costs Unamortized Premiums (Discounts) Total Debt
Senior Secured Notes:
4.875% 2024 Senior Secured Notes Cliffs 5.00% $ 394.5  $ (3.7) $ (1.5) $ 389.3 
9.875% 2025 Senior Secured Notes Cliffs 10.57% 955.2  (8.1) (25.8) 921.3 
6.75% 2026 Senior Secured Notes Cliffs 6.99% 845.0  (21.4) (9.0) 814.6 
Senior Unsecured Notes:
7.625% 2021 AK Senior Notes AK Steel 7.33% 33.5  —  0.1  33.6 
7.50% 2023 AK Senior Notes AK Steel 6.17% 12.8  —  0.5  13.3 
6.375% 2025 Senior Notes Cliffs 8.11% 64.3  (0.2) (4.6) 59.5 
6.375% 2025 AK Senior Notes AK Steel 8.11% 38.4  —  (2.7) 35.7 
1.50% 2025 Convertible Senior Notes Cliffs 6.26% 296.3  (3.7) (53.0) 239.6 
5.75% 2025 Senior Notes Cliffs 6.01% 396.2  (2.6) (4.1) 389.5 
7.00% 2027 Senior Notes Cliffs 9.24% 88.0  (0.3) (9.6) 78.1 
7.00% 2027 AK Senior Notes AK Steel 9.24% 56.3  —  (6.0) 50.3 
5.875% 2027 Senior Notes Cliffs 6.49% 555.5  (4.3) (18.6) 532.6 
6.25% 2040 Senior Notes Cliffs 6.34% 262.7  (1.8) (2.8) 258.1 
IRBs due 2024 to 2028 AK Steel Various 92.0  —  2.3  94.3 
ABL Facility
Cliffs2
2.77% 2,000.0  —  —  400.0 
Total long-term debt $ 4,309.8 
1 Unless otherwise noted, references in this column to "Cliffs" are to Cleveland-Cliffs Inc., and references to "AK Steel" are to AK Steel Corporation.
2 Refers to Cleveland-Cliffs Inc. as borrower under our ABL Facility.
(In Millions)
December 31, 2019
Debt Instrument
Issuer1
Annual Effective
Interest Rate
 Total Principal Amount Debt Issuance Costs Unamortized Discounts Total Debt
Senior Secured Notes:
4.875% 2024 Senior Notes Cliffs 5.00% $ 400.0  $ (4.6) $ (1.8) $ 393.6 
Senior Unsecured Notes:
1.50% 2025 Convertible Senior Notes Cliffs 6.26% 316.3  (4.6) (65.0) 246.7 
5.75% 2025 Senior Notes Cliffs 6.01% 473.3  (3.6) (5.5) 464.2 
5.875% 2027 Senior Notes Cliffs 6.49% 750.0  (6.3) (27.3) 716.4 
6.25% 2040 Senior Notes Cliffs 6.34% 298.4  (2.2) (3.3) 292.9 
Former ABL Facility
Cliffs2
N/A 450.0  N/A N/A — 
Total long-term debt $ 2,113.8 
1 Unless otherwise noted, references in this column to "Cliffs" are to Cleveland-Cliffs Inc.
2 Refers to Cleveland-Cliffs Inc. and certain of its subsidiaries as borrowers under our Former ABL Facility.
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 $736.4 million aggregate principal amount of our outstanding senior notes of various series, which resulted in debt reduction of $181.2 million. During the second quarter of 2020, we also repurchased an additional $11.2 million aggregate principal amount of our outstanding senior notes of various series with cash on hand. On June 1, 2020, we redeemed $7.3 million aggregate principal amount of our outstanding 2020 IRBs.
    On March 13, 2020, in connection with the Merger, we purchased $364.2 million aggregate principal amount of 7.625% 2021 AK Senior Notes and $310.7 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, on March 27, 2020, we purchased $8.5 million aggregate principal amount of the 7.625% 2021 AK Senior Notes and $56.5 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 gain on extinguishment:
(In Millions)
Nine Months Ended
September 30, 2020
Debt Instrument Debt Extinguished Gain on Extinguishment
7.625% 2021 AK Senior Notes $ 372.7  $ 0.4 
7.50% 2023 AK Senior Notes 367.2  2.8 
4.875% 2024 Senior Secured Notes 5.5  0.5 
6.375% 2025 Senior Notes 167.5  21.3 
1.50% 2025 Convertible Senior Notes 20.0  1.3 
5.75% 2025 Senior Notes 77.1  16.3 
7.00% 2027 Senior Notes 247.3  28.4 
5.875% 2027 Senior Notes 194.5  48.7 
6.25% 2040 Senior Notes 35.7  12.9 
$ 1,487.5  $ 132.6 
Debt Extinguishments - 2019
    The following is a summary of the debt extinguished with cash and the respective loss on extinguishment:
(In Millions)
Nine Months Ended
September 30, 2019
Debt Instrument Debt Extinguished (Loss) on Extinguishment
4.875% 2021 Senior Notes $ 124.0  $ (5.3)
5.75% 2025 Senior Notes 600.0  (12.9)
$ 724.0  $ (18.2)
ABL Facility
    As of September 30, 2020, 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)
September 30,
2020
Available borrowing base on ABL Facility1
$ 1,715.2 
Borrowings (400.0)
Letter of credit obligations2
(192.2)
Borrowing capacity available $ 1,123.0 
1 As of September 30, 2020, the ABL Facility has a maximum borrowing base of $2.0 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, IRBs and environmental obligations.
Debt Maturities
    The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at September 30, 2020:
(In Millions)
Maturities of Debt
2020 (remaining period of year) $ — 
2021 33.5 
2022 — 
2023 12.8 
2024 456.5 
Thereafter 3,987.9 
Total maturities of debt $ 4,490.7