01—Abstract
Summary
Summary of the 8-K filed July 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Steel Dynamics, Inc. (NASDAQ/GS: STLD) completed the sale of $600 milliona aggregate principal amount of its 5.375% Notes due August 15, 2034 on July 3, 2024, under its effective Form S-3 shelf registration.
The company reports net proceeds of approximately $586 millionb after expenses and the underwriting discount. The Notes are senior unsecured obligations, rank equally with existing and future senior indebtedness, and are effectively subordinated to any secured debt and structurally subordinated to all liabilities of subsidiaries. Interest is payable semi-annually beginning February 15, 2025.
The company plans to use the proceeds for general corporate purposes, which may include repaying its 2.800% Senior Notes due 2024 (described in the press release as $400 millionc, due December 2024), working capital, capital expenditures, subsidiary advances or investments, acquisitions, debt redemption and repayment, and share repurchases. The Notes may be redeemed before May 15, 2034 at a make-whole price based on a Treasury Rate plus 20 basis points, and at 100% of principal plus accrued interest thereafter. Upon a Change of Control Triggering Event, holders may require repurchase at 101% of principal plus accrued interest.
The indenture includes covenants limiting liens securing indebtedness, certain sale and leaseback transactions, and asset sales or mergers with other companies. In the accompanying press release, CFO Theresa E.
Wagler stated the company remains committed to maintaining its investment grade credit ratings. The Notes have no established trading market, and the company does not intend to list them on a national securities exchange.
02—Key points
Key Highlights
- Issued $600 million of 5.375% Senior Unsecured Notes due August 15, 2034, closing July 3, 2024
- Net proceeds of approximately $586 million after expenses and underwriting discount
- Proceeds intended for general corporate purposes, including repayment of the 2.800% Senior Notes due 2024
- Make-whole redemption before May 15, 2034 at Treasury Rate plus 20 basis points; par redemption thereafter
- Change of Control Triggering Event put right at 101% of principal plus accrued interest
- Indenture covenants limit liens, certain sale and leaseback transactions, and mergers or asset sales
- CFO states commitment to maintaining investment grade credit ratings
03—Questions
Frequently Asked Questions
What did Steel Dynamics issue and how much did it raise?
The company completed the offering of $600 million aggregate principal amount of 5.375% Notes due 2034, receiving net proceeds of approximately $586 million after expenses and the underwriting discount.
When do the Notes mature and when is interest paid?
The Notes mature on August 15, 2034, unless earlier redeemed. Interest accrues at 5.375% per annum and is paid semi-annually on February 15 and August 15, beginning February 15, 2025.
How will the company use the proceeds?
The company plans to use the net proceeds for general corporate purposes, which may include repaying its 2.800% Senior Notes due 2024, working capital, capital expenditures, subsidiary investments, acquisitions, debt redemption, and purchases of common stock.
How is the Notes' ranking described?
The Notes are senior unsecured obligations that rank equally with existing and future senior indebtedness, are senior to future subordinated debt, are effectively subordinated to any secured debt to the extent of collateral value, and are structurally subordinated to all subsidiary liabilities.
Can the company redeem the Notes early?
Before May 15, 2034, the company may redeem the Notes at the greater of a make-whole price based on the Treasury Rate plus 20 basis points or 100% of principal, plus accrued interest. On or after May 15, 2034, redemption is at 100% of principal plus accrued interest.
04—Continue