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Cleveland-Cliffs Enters New Credit Agreement
08/20/2007 - Cleveland-Cliffs enters into a new unsecured, $800-million credit agreement that provides more-flexible terms and conditions, along with improved pricing.
Cleveland-Cliffs Inc. has entered into a new unsecured, $800-million credit agreement. The agreement includes a $200-million term loan and a $600-million revolver, with a $200-million accordion feature that can be used to expand the size of the facility.
The five-year agreement replaces the company's previous $500 million revolving credit facility scheduled to expire in 2011 and a $150-million credit agreement facility scheduled to expire in 2008.
The new agreement, which was arranged by Bank of America and JPMorgan Securities Inc., provides more-flexible terms and conditions, along with improved pricing compared with the previous facility. It also includes less-restrictive financial covenants to accommodate the execution of Cliffs’ investment strategy.
“Cliffs has entered a new era of growth as an international mining entity and it is important we maintain the liquidity necessary to seize opportunities when they present themselves,” said Laurie Brlas, Cliffs’ Senior Vice President, Chief Financial Officer and Treasurer. “The new arrangement reflects our intention to optimize Cliffs’ capital structure, lower our cost of capital and generate more value for shareholders. We appreciate the support and confidence of our bank syndicate.”
Bank of America serves as Administrative Agent and JPMorgan Chase Bank serves as Syndication Agent. In addition, 11 other banks are participating in the syndicate.
