Cliffs reaches $1.75bn credit arrangement with banks

Troubled US raw materials producer Cliffs Natural Resources has reached an agreement with a syndicate of lenders over a $1.75 billion credit facility, the miner said on Monday June 30.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

The miner said that its syndicate of lending banks had unanimously agreed to amend an existing $1.75 billion unsecured revolving credit facility.

Cliffs said that existing facility, which used a leverage covenant ratio, had been replaced with a debt-to-capitalisation ratio, which it described as a “more consistent” source of liquidity.

The miner said the new arrangement would allow its borrowing capacity to be less susceptible to the impact of volatile iron ore and metallurgical coal pricing. Cliffs said that it had tested the changes to the facility in a variety of pricing scenarios and was “confident” in the amended terms.

“The new amended terms are effective [from] June 30, 2014 and received the unanimous support of the entire lender group, despite requiring only greater than 50% approval,” Cliffs said.

The facility will be maintained at $1.75 billion and will mature on the existing date of October 16, 2017, Cliffs said.

Cliffs cfo Terry Paradie said that the arrangement was an endorsement of the underlying fundamentals of the company’s long-term strategy.

Cliffs, one of North America’s largest iron ore pellet and coking coal producers, has faced criticism from its shareholders for losing more than 85% of its equity value since 2011.

One of the company’s largest shareholders, Casablanca Capital, demanded that the miner replace its management team earlier this month.

Cliffs said that it planned to idle its Pinaccle coking coal mine in West Virginia on June 26, citing deteriorating conditions in the metallurgical coal market.

What to read next
Market participants are cautiously optimistic about a rebound in iron ore concentrate premiums, with steelmakers around the world set to ramp-up production in line with an anticipated increase in demand for steel products, Fastmarkets understands
General Motors (GM) is investing $650 million to develop the Thacker Pass mine in Nevada, the largest known source of lithium in the US and the third largest in the world
Electrolysis processes developed by Boston Metal and Electra that eliminate the need for coal in steel production could be key to a net-zero emissions future for the metallics industry, attendees learned at Fastmarkets’ conference on January 17-19 in Dallas
Low supply, strong demand to spur scrap prices higher in Feb, market says
US deep-sea ferrous export prices from the East Coast to Turkey have plateaued, with a Turkish mill purchasing a cargo at prices stable from the last-reported sale
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.