Big River Steel Closes on $487 Million of Thirty-Year Debt Financing and $290 Million of Equity Financing

OSCEOLA, Ark., June 3, 2019 /PRNewswire/ -- Big River Steel announced today that it closed and funded $487 million of thirty-year bonds and $290 million of equity financing on Friday, May 31, 2019. The bonds, which are interest-only for the next twenty years, were priced at par with a coupon of 4.5% and traded in the when-issued market as high as 103 to yield 4.137%.  The equity financing was provided on a pro rata basis by Big River's current ownership group.  

Big River Steel will use the bond and equity proceeds to expand its scrap metal recycling and flat-rolled steel production facility in Osceola, Arkansas. The expansion will double Big River's flat-rolled steel production rated capacity to 3.3 million tons annually. The expansion also sets the stage for an incremental downstream investment which will allow the company to produce even higher grades of electrical steels, demand for which is expected to escalate with continued focus on energy efficiency and announced increases in hybrid and electric vehicle production.

Big River Steel began operating its Flex Mill™ thirty months ago and has already positioned itself as one of the premier steel producers in North America in terms of profitability, product quality, employee productivity and environmental sustainability. Highlighting the company's focus on environmental sustainability is the fact that Big River is the only steel producer in the world to be LEED certified (Leadership in Energy and Environmental Design).  Big River's Flex Mill™ technology, along with the company's focus on machine learning and data analytics, allow the company to produce some of the most demanding steel grades while maintaining an industry-leading cost structure.

When commenting on the highly successful bond offering, Ari Levy, Big River Steel's director of finance, stated: "The level of interest shown by the bond investor community in supporting Big River Steel's long-term growth is much appreciated and is a testament to the outstanding effort put forth by our employees in meeting the needs of our customers.  Our ability to quickly penetrate several of the most demanding steel markets, including directly selling to a number of the world's leading automakers, was a significant factor leading to our success in issuing what we believe to be the longest maturity bonds in the North American steel industry."

The Arkansas Development Finance Authority acted as the conduit issuer of the bonds, the proceeds from which were loaned to Big River Steel. Goldman, Sachs & Co. LLC served as lead underwriter for the offering and Crews & Associates and SunTrust Robinson Humphrey acted as co-managers.

This press release shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  

This press release may contain forward-looking statements, including, but not limited to, the expansion project and financing plans, including the offering of the bonds and equity financing. Forward-looking statements may generally be identified by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," "target," or "continue" and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. We undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect actual outcomes, except as required by law.

SOURCE Big River Steel

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