U. S. Steel Issuing Nearly US$1 Billion In New Bonds
05/03/2016 - United States Steel Corporation is nearly doubling the amount of new debt it plans to issue to repay maturing borrowings.
On Tuesday, the company said it had priced US$980 million in new corporate bonds at 8.375 percent, upping the principal from the US$500 million it said it would issue the day prior.
A U. S. Steel spokeswoman said the company was not commenting beyond its announcement. The announcement said the steelmaker planned to use proceeds from the senior secured notes to repay outstanding debt, focusing on debt with near-term maturities. The rest is to be put toward general corporate purposes.
The new bonds will mature on 1 July 2021.
The Pittsburgh Post-Gazette on Monday noted that the company has US$450 million in senior notes coming due in June 2017.
After announcing the bond issue, Moody’s downgraded U. S. Steel’s debt on expectations that challenging market conditions will persist, especially for oil country tubular goods.
“Given industry fundamentals, we expect the time horizon for a recovery in the OCTG market to be extended as oversupply continues in the global oil markets, drilling activity continues extremely weak, and demand growth remains tepid. Further, the timing of an oil price recovery remains uncertain but we believe the time frame will be protracted,” Moody’s said in a statement.
A U. S. Steel spokeswoman said the company was not commenting beyond its announcement. The announcement said the steelmaker planned to use proceeds from the senior secured notes to repay outstanding debt, focusing on debt with near-term maturities. The rest is to be put toward general corporate purposes.
The new bonds will mature on 1 July 2021.
The Pittsburgh Post-Gazette on Monday noted that the company has US$450 million in senior notes coming due in June 2017.
After announcing the bond issue, Moody’s downgraded U. S. Steel’s debt on expectations that challenging market conditions will persist, especially for oil country tubular goods.
“Given industry fundamentals, we expect the time horizon for a recovery in the OCTG market to be extended as oversupply continues in the global oil markets, drilling activity continues extremely weak, and demand growth remains tepid. Further, the timing of an oil price recovery remains uncertain but we believe the time frame will be protracted,” Moody’s said in a statement.
