NOTE 20 - SUBSEQUENT EVENTS
On October 24, 2014, we amended the Amended and Restated Multicurrency Credit Agreement among Cliffs Natural Resources Inc. and various lenders dated August 11, 2011 (as further amended by Amendment No. 1 as of October 16, 2012, Amendment No. 2 as of February 8, 2013, Amendment No. 3 as of June 30, 2014 and Amendment No. 4 as of September 9, 2014), or revolving credit agreement, to effect the following:
|
|
• |
Reduces the size of the existing facility from $1.250 billion to $1.125 billion.
|
|
|
• |
Grants a valid and perfected first-priority (subject to certain permitted liens) security interest in certain property and assets of the Company and certain of its subsidiaries, subject to customary exclusions all specified in a security agreement. |
|
|
• |
With effect as of September 30, 2014, removes the maximum balance sheet leverage ratio of debt to capitalization of less than 45 percent, which was a covenant introduced in June 2014, and replaces that covenant with a maximum leverage ratio covenant of secured debt to EBITDA that is not to exceed 3.5 times.
|
|
|
• |
Retains the minimum interest coverage ratio requirement of 3.5 times, and subsequently reduces the minimum interest coverage ratio to 2.0 times upon completion of certain collateral actions within 60 days of the execution of the amendment.
|
|
|
• |
Subjects restricted payments (including the $200 million share repurchase, which was approved in September 2014) and current dividend structure to a $400 million liquidity test.
|
|
|
• |
Adds limitations regarding acquisitions, investments (including investments in non-wholly owned subsidiaries and joint ventures) and subsidiary debt. |
|
|
• |
Eliminates the accounts receivable securitization facility. |
|
|
• |
Terminates the ability to have foreign borrowers under the revolving credit agreement. |
The amended facility retains substantial financial flexibility for management to execute our strategy and provides us a consistent source of liquidity.
On November 4, 2014, the Board of Directors declared a quarterly cash dividend on the Company's common shares of $0.15 per share to be paid on December 1, 2014 to shareholders of record on November 15, 2014. The Board also determined that this dividend and future dividends may be paid out of capital surplus.
|