Cliffs Natural Resources Inc. CLF has announced the expiration as well as the final results of its offer to purchase for cash up to $123,694,000 (the maximum amount after being increased from $100,000,000) of its outstanding 3.95% Senior Notes due 2018. The tender offer expired on Aug 27, 2015.
The total combined principal amount of the Notes validly tendered and not validly withdrawn was $124,839,000, which surpassed the maximum amount. The tendered amount includes $123,694,000 aggregate principal amount of the notes validly tendered as of Aug 13, 2015 and $1,145,000 aggregate principal amount of the notes validly tendered after the Early Tender Date but before the Expiration Date.
As the maximum amount exceeded by no more than 2% of such amount, all notes tendered in the tender offer are accepted for purchase. Apart from the total consideration or tender offer consideration the holders of notes will also get accrued and unpaid interest up to, but not including, the payment date.
The tender offer has enabled the company to reduce its debt by $125 million along with an $18 million reduction in interest expense until maturity, and achieve a $56 million equity value creation through discount capture.
Cliffs released its second-quarter 2015 results last month. The company had $276.2 million in cash and cash equivalents as of Jun 30, 2015, compared with $359.9 million as of Jun 30, 2014. Long-term debt stood at $2,887.4 million as of Jun 30, 2015, compared with $3,293 million as of Jun 30, 2014.
At the end of second-quarter 2015, Cliffs had net debt of $2.6 billion, compared with net debt of $3.1 billion at the end of second-quarter 2014. There was nothing drawn on the company's new asset-based lending facility at the end of the reported quarter. Reduction in net debt was a result of several actions including asset sales, exchange offers and open-market bond repurchases during the prior twelve months.
Cliffs’ capital expenditure reduced 70% year over year to $19 million in the second quarter. This includes capital spending related to North American Coal. Depreciation, depletion and amortization amounted to $31 million.
Cliffs currently carries a Zacks Rank #4 (Sell).
Some better-ranked mining stocks include Denison Mines Corp. DNN, OCI Resources LP OCIR and Zenyatta Ventures Ltd ZENYF. All of these stocks hold a Zacks Rank #2 (Buy).
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