| DEBT AND CREDIT FACILITIES |
NOTE 8 - 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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June 30,
2022 |
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December 31,
2021 |
| Senior Secured Notes: |
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9.875% 2025 Senior Secured Notes |
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Cliffs |
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10.57% |
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$ |
—
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$ |
607 |
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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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829
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845 |
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| Senior Unsecured Notes: |
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1.500% 2025 Convertible Senior Notes |
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Cliffs |
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6.26% |
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—
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294 |
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7.000% 2027 Senior Notes |
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Cliffs |
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9.24% |
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73
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73 |
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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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56
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56 |
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5.875% 2027 Senior Notes |
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Cliffs |
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6.49% |
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556
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556 |
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4.625% 2029 Senior Notes |
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Cliffs |
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4.63% |
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370
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500 |
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4.875% 2031 Senior Notes |
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Cliffs |
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4.88% |
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339
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500 |
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6.250% 2040 Senior Notes |
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Cliffs |
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6.34% |
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263
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263 |
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| IRBs due 2024 to 2028 |
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AK Steel |
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Various |
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—
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66 |
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| ABL Facility |
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Cliffs2
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Variable3
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2,245
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1,609 |
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| Total principal amount |
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4,731
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5,369 |
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| Unamortized discounts and issuance costs |
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(63) |
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(131) |
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| Total long-term debt |
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$ |
4,668
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$ |
5,238 |
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1 Unless otherwise noted, references in this column and throughout this NOTE 8 - DEBT AND CREDIT FACILITIES to "Cliffs" are to Cleveland-Cliffs Inc., and references to "AK Steel" are to AK Steel Corporation (n/k/a Cleveland-Cliffs Steel Corporation).
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2 Refers to Cleveland-Cliffs Inc. as borrower under our ABL Facility.
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3 Our ABL Facility annual effective interest rate was 2.75% and 1.87%, respectively, as of June 30, 2022 and December 31, 2021.
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Debt Extinguishments
The following is a summary of the debt extinguished and the respective impact on extinguishment:
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(In Millions) |
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Three Months Ended
June 30, 2022 |
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Six Months Ended
June 30, 2022 |
| Debt Instrument |
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Debt Extinguished |
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Gain (Loss) on Extinguishment |
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Debt Extinguished |
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Gain (Loss) on Extinguishment |
9.875% 2025 Senior Secured Notes |
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$ |
607
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$ |
(85) |
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$ |
607
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$ |
(85) |
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6.750% 2026 Senior Notes |
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16
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(1) |
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16
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(1) |
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1.500% 2025 Convertible Senior Notes |
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—
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—
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294
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(16) |
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4.625% 2029 Senior Notes |
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130
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8
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130
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8
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4.875% 2031 Senior Notes |
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161
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12
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161
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12
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| IRBs due 2024 to 2028 |
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—
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—
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66
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2
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| Total |
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$ |
914
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$ |
(66) |
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$ |
1,274
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$ |
(80) |
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ABL Facility
As of June 30, 2022, 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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(In Millions) |
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June 30,
2022 |
Available borrowing base on ABL Facility1
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$ |
4,500
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| Borrowings |
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(2,245) |
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Letter of credit obligations2
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(178) |
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| Borrowing capacity available |
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$ |
2,077
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1 As of June 30, 2022, the ABL Facility has a maximum available borrowing base of $4.5 billion. The borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
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2 We issued standby letters of credit with certain financial institutions in order to support business obligations, including, but not limited to, workers' compensation, employee severance, insurance, operating agreements and environmental obligations.
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Debt Maturities
The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at June 30, 2022:
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(In Millions) |
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Maturities of Debt |
| 2022 (remaining period of year) |
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$ |
— |
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| 2023 |
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— |
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| 2024 |
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— |
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| 2025 |
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2,245 |
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| 2026 |
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829 |
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| Thereafter |
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1,657 |
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| Total maturities of debt |
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$ |
4,731 |
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