| DEBT AND CREDIT FACILITIES |
NOTE 8 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In Millions) |
| Debt Instrument |
|
Issuer1
|
|
Annual Effective
Interest Rate
|
|
September 30,
2022 |
|
December 31,
2021 |
| Senior Secured Notes: |
|
|
|
|
|
|
|
|
9.875% 2025 Senior Secured Notes |
|
Cliffs |
|
10.57% |
|
$ |
—
|
|
|
$ |
607 |
|
6.750% 2026 Senior Secured Notes |
|
Cliffs |
|
6.99% |
|
829
|
|
|
845 |
|
| Senior Unsecured Notes: |
|
|
|
|
|
|
|
|
1.500% 2025 Convertible Senior Notes |
|
Cliffs |
|
6.26% |
|
—
|
|
|
294 |
|
7.000% 2027 Senior Notes |
|
Cliffs |
|
9.24% |
|
73
|
|
|
73 |
|
7.000% 2027 AK Senior Notes |
|
AK Steel |
|
9.24% |
|
56
|
|
|
56 |
|
5.875% 2027 Senior Notes |
|
Cliffs |
|
6.49% |
|
556
|
|
|
556 |
|
4.625% 2029 Senior Notes |
|
Cliffs |
|
4.63% |
|
370
|
|
|
500 |
|
4.875% 2031 Senior Notes |
|
Cliffs |
|
4.88% |
|
326
|
|
|
500 |
|
6.250% 2040 Senior Notes |
|
Cliffs |
|
6.34% |
|
235
|
|
|
263 |
|
| IRBs due 2024 to 2028 |
|
AK Steel |
|
Various |
|
—
|
|
|
66 |
|
| ABL Facility |
|
Cliffs2
|
|
Variable3
|
|
2,090
|
|
|
1,609 |
|
| Total principal amount |
|
|
|
|
|
4,535
|
|
|
5,369 |
|
| Unamortized discounts and issuance costs |
|
|
|
|
|
(60) |
|
|
(131) |
|
| Total long-term debt |
|
|
|
|
|
$ |
4,475
|
|
|
$ |
5,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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).
|
2 Refers to Cleveland-Cliffs Inc. as borrower under our ABL Facility.
|
3 Our ABL Facility annual effective interest rate was 4.23% and 1.87%, respectively, as of September 30, 2022 and December 31, 2021.
|
Debt Extinguishments
The following is a summary of the debt extinguished and the respective impact on extinguishment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Millions) |
|
|
Three Months Ended
September 30, 2022 |
|
Nine Months Ended
September 30, 2022 |
| Debt Instrument |
|
Debt Extinguished |
|
Gain on Extinguishment |
|
Debt Extinguished |
|
Gain (Loss) on Extinguishment |
9.875% 2025 Senior Secured Notes |
|
$ |
—
|
|
|
$ |
—
|
|
|
$ |
607
|
|
|
$ |
(85) |
|
6.750% 2026 Senior Notes |
|
—
|
|
|
—
|
|
|
16
|
|
|
(1) |
|
1.500% 2025 Convertible Senior Notes |
|
—
|
|
|
—
|
|
|
294
|
|
|
(16) |
|
4.625% 2029 Senior Notes |
|
—
|
|
|
—
|
|
|
130
|
|
|
8
|
|
4.875% 2031 Senior Notes |
|
13
|
|
|
1
|
|
|
174
|
|
|
13
|
|
6.250% 2040 Senior Notes |
|
28
|
|
|
3
|
|
|
28
|
|
|
3
|
|
| IRBs due 2024 to 2028 |
|
—
|
|
|
—
|
|
|
66
|
|
|
2
|
|
| Total |
|
$ |
41
|
|
|
$ |
4
|
|
|
$ |
1,315
|
|
|
$ |
(76) |
|
ABL Facility
As of September 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:
|
|
|
|
|
|
|
|
|
|
|
(In Millions) |
|
|
September 30,
2022 |
Available borrowing base on ABL Facility1
|
|
$ |
4,500
|
|
| Borrowings |
|
(2,090) |
|
Letter of credit obligations2
|
|
(166) |
|
| Borrowing capacity available |
|
$ |
2,244
|
|
|
|
|
1 As of September 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.
|
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.
|
Debt Maturities
The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
(In Millions) |
|
|
Maturities of Debt |
| 2022 (remaining period of year) |
|
$ |
— |
|
| 2023 |
|
— |
|
| 2024 |
|
— |
|
| 2025 |
|
2,090 |
|
| 2026 |
|
829 |
|
| Thereafter |
|
1,616 |
|
| Total maturities of debt |
|
$ |
4,535 |
|
|