WEST CHESTER, OH -- (Marketwired) -- 06/20/16 -- AK Steel Holding Corporation (NYSE: AKS) announced today the successful closing of the registered offering (the "Secured Notes Offering") by its subsidiary, AK Steel Corporation ("AK Steel"), of $380.0 million aggregate principal amount of 7.50% senior secured notes due 2023 (the "New Notes") and of the previously announced tender offer (the "Tender Offer") for AK Steel's 8.750% senior secured notes due 2018 (the "Old Notes"). The Tender Offer expired as of 5:00 p.m., New York City time, on June 17, 2016 (the "Expiration Time"). Holders validly tendered $251,443,000 in aggregate principal amount of the Old Notes prior to the Expiration Time at an aggregate purchase price equal to $1,047.50 per $1,000 principal amount of Old Notes tendered, plus accrued and unpaid interest. AK Steel has accepted for purchase all Old Notes that were validly tendered prior to the Expiration Time. Today AK Steel also issued a notice of redemption stating that it will redeem any and all of its outstanding Old Notes on July 20, 2016 (the "Redemption Date"), as described below.
The joint book-running managers for the Secured Notes Offering were BofA Merrill Lynch, Deutsche Bank Securities, J.P. Morgan, Wells Fargo Securities, Citigroup, Credit Suisse and Goldman, Sachs & Co.
The net proceeds of the Secured Notes Offering were approximately $353.1 million after deducting the underwriting discounts and commissions, estimated offering expenses payable by AK Steel and premium for the repurchase and redemption of the Old Notes. AK Steel will use the net proceeds from the Secured Notes Offering, together with cash on hand and/or borrowings under its revolving credit facility, to pay the consideration for its Tender Offer of Old Notes and to redeem all remaining outstanding Old Notes on the Redemption Date.
On June 20, 2016, U.S. Bank National Association, on behalf of and at the direction of AK Steel, pursuant to the terms of the indenture governing the Old Notes, delivered notice to all holders of Old Notes calling for the redemption of any and all Old Notes that remain outstanding following the completion of the Tender Offer at a redemption price of 104.375% of the principal amount of the Old Notes, plus accrued and unpaid interest to, but not including, the Redemption Date. Such redemption is expected to occur on the Redemption Date.
AK Steel retained BofA Merrill Lynch to serve as the sole dealer manager for the Tender Offer. AK Steel also retained Global Bondholder Services Corporation to serve as the information agent and depositary.
This press release is for informational purposes only and is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consent with respect to the Old Notes or any other securities. The Tender Offer was made solely pursuant to the Offer to Purchase, dated June 13, 2016, and the related Letter of Transmittal, which set forth the complete terms of the Tender Offer.
Certain statements the company made or incorporated by reference in this release, or made in other documents furnished to or filed with the Securities Exchange Commission, as well as in press releases or in oral presentations made by company employees, reflect management's estimates and beliefs and are intended to be "forward-looking statements" identified in the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "believes," "intends," "plans," "estimates" and other similar references to future periods typically identify forward-looking statements. The company cautions readers that forward-looking statements reflect the company's current beliefs and judgments, but are not guarantees of future performance or outcomes. They are based on a number of assumptions and estimates that are inherently affected by economic, competitive, regulatory, and operational risks, uncertainties and contingencies that are beyond the company's control, and upon assumptions about future business decisions and conditions that may change.
Forward-looking statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events or performance will differ materially from such predictions as a result of certain risk factors, including reduced selling prices, shipments and profits associated with a highly competitive and cyclical industry; increased global steel production and imports; changes in the cost of raw materials and energy; the company's significant amount of debt and other obligations; severe financial hardship or bankruptcy of one or more of the company's major customers or key suppliers; reduced demand in key product markets due to competition from aluminum or other alternatives to steel; excess inventory of raw materials; supply chain disruptions or poor quality of raw materials; production disruption or reduced production levels; the company's healthcare and pension obligations; not reaching new labor agreements on a timely basis; major litigation, arbitrations, environmental issues and other contingencies; regulatory compliance and changes; climate change and greenhouse gas emission limitations; financial, credit, capital and banking markets; derivative contracts to hedge commodity pricing volatility; potential permanent idling of facilities; inability to fully realize benefits of margin enhancement initiatives; information technology security threats and cybercrime; as well as those risks and uncertainties discussed in more detail in the company's Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, as updated in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission.
As such, the company cautions readers not to place undue reliance on forward-looking statements, which speak only to the company's plans, assumptions and expectations as of the date hereof. The company undertakes no obligation to publicly update any forward-looking statement, except as required by law.
About AK Steel
AK Steel is a world leader in the production of flat-rolled carbon, stainless and electrical steel products, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. Headquartered in West Chester, Ohio (Greater Cincinnati), the company employs approximately 8,500 men and women at eight steel plants, two coke plants and two tube manufacturing plants across six states: Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia.
Lisa H. Jester
Corporate Manager, Communications and Public Relations
Douglas O. Mitterholzer
General Manager, Investor Relations