ArcelorMittal Announces Pricing of Bond Issue
On June 11, 2024, ArcelorMittal announced the pricing of two bond offerings totaling $1 billion. The company will issue $500 million of 6.00% notes due June 17, 2034, and another $500 million of 6.35% notes due June 17, 2054. The net proceeds, approximately $989.29 million before expenses, will be used for general corporate purposes. The offering is expected to close on June 17, 2024, pending customary conditions. The issuer has filed a registration statement with the SEC. For more detailed information, investors are encouraged to read the prospectus available on the SEC website.
- ArcelorMittal is raising $1 billion through bond offerings.
- The company secured a 6.00% interest rate for notes due in 2034 and 6.35% for notes due in 2054.
- Net proceeds, approximately $989.29 million, will be used for general corporate purposes.
- The offering is scheduled to close soon, indicating efficient capital raising.
- High interest rates of 6.00% and 6.35% may indicate increased borrowing costs.
- The issuance of $1 billion in bonds increases the company's debt burden.
- There is potential dilution of shareholder value due to increased liabilities.
Insights
ArcelorMittal's recent bond issuance, raising
Interest rates of 6.00% and 6.35% reflect the costs of borrowing in the current market environment, which could indicate investor confidence in the company's future performance despite the relatively high rates compared to historical norms.
Long-term Debt: By opting for 20- and 30-year maturities, ArcelorMittal is locking in interest rates now, potentially safeguarding against future rate hikes. However, this also means the company is committing to significant interest payments over a long period, which could impact its flexibility in the face of economic downturns or declining steel demand.
This bond issue could be seen as a vote of confidence by institutional investors in ArcelorMittal's financial health. Still, retail investors should be mindful of the potential long-term commitments and constraints that come with such debt, particularly in a sector as cyclical as steel.
This bond issuance provides insights into ArcelorMittal’s strategic priorities and market positioning. The allocation of proceeds for general corporate purposes suggests the company is focusing on maintaining operational liquidity and financial stability, rather than earmarking funds for specific projects or debt refinancing.
The relatively high interest rates signal that the company is leveraging current investor sentiment but also reflect the broader economic conditions and risk perceptions associated with the steel industry.
Investor Sentiment: The successful pricing and anticipated closure of this offering on June 17, 2024, indicate strong demand from institutional investors, which is a positive sign. This may point to confidence in ArcelorMittal's operational strategy and financial standing, amidst the backdrop of fluctuating steel prices and global economic uncertainties.
For retail investors, this bond issue could reflect the company's solid market positioning and ability to attract considerable investment. However, it's critical to weigh these positive indicators against the potential risks of high debt commitments and market volatility.
11 June 2024, 08:00 CET
ArcelorMittal (‘the Company’ or ‘the Issuer’) priced yesterday an offering of US
The net proceeds to ArcelorMittal (before expenses), amounting to approximately
The offering is scheduled to close on 17 June 2024, subject to satisfaction of customary conditions.
The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by contacting J.P. Morgan Securities LLC by calling collect at 1-212-834-4533; BofA Securities, Inc. by calling 1-800-294-1322; Citigroup Global Markets Inc. by calling toll-free: 1-800-831-9146; Goldman Sachs & Co. LLC by calling toll-free: 1-866-471-2526; RBC Capital Markets, LLC. by calling toll-free: 1-866-375-6829; or SMBC Nikko Securities America, Inc. by calling toll free: 1-888-868-6856.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
This press release may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although ArcelorMittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the "SEC") made or to be made by ArcelorMittal, including ArcelorMittal's Annual Report on Form 20-F for the year ended December 31, 2023 filed on February 28, 2024, and ArcelorMittal’s first quarter earnings release furnished to the SEC on Form 6-K on May 28, 2024 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise.
No communication and no information in respect of the offering of securities may be distributed to the public in any jurisdiction where a registration or approval is required. The offering or subscription of securities may be subject to specific legal or regulatory restrictions in certain jurisdictions. ArcelorMittal takes no responsibility for any violation of any such restrictions by any person.
This press release is an advertisement and does not comprise a prospectus for the purposes of Regulation (EU) 2017/1129, amended (the “Prospectus Regulation”), or the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2020, as amended. This press release does not constitute or form part of, and should not be construed as, an offer to sell, or the solicitation or invitation of any offer to buy or subscribe for, any securities in any jurisdiction or an inducement to enter into investment activity. No part of this press release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Any purchase of any securities should be made solely on the basis of the offering memorandum prepared in connection with the issuance of securities by ArcelorMittal, which will contain the definitive terms of the securities transactions described herein.
This press release is only addressed to and directed at persons in member states of the European Economic Area who are not Retail Investors and should not be acted upon or relied upon in any member state of the European Economic Area by persons who are Retail Investors. For these purposes, (a) a Retail Investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "EU MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of EU MiFID II; or (iii) not a qualified investor (as defined in the Prospectus Regulation ; and (b) the expression an “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Notes. This press release is only addressed to and directed at persons in the United Kingdom who are not Retail Investors and should not be acted upon or relied upon the United Kingdom by persons who are Retail Investors. For these purposes, (a) a Retail Investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "EUWA"); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, “FSMA”) and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor, as defined in Article 2 of the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA; and (b) the expression an “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Notes.
This press release is directed only at persons in the United Kingdom having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and to those persons to whom it can otherwise lawfully be distributed.
No PRIIPs key information document (KID) has been prepared as not available to retail investors in EEA or the UK.
ENDS
About ArcelorMittal
ArcelorMittal is one of the world’s leading integrated steel and mining companies with a presence in 60 countries and primary steelmaking operations in 15 countries. It is the largest steel producer in Europe, among the largest in the Americas, and has a growing presence in Asia through its joint venture AM/NS India. ArcelorMittal sells its products to a diverse range of customers including the automotive, engineering, construction and machinery industries, and in 2023 generated revenues of
Our purpose is to produce smarter steels for people and planet. Steels made using innovative processes which use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for the renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
http://corporate.arcelormittal.com/
| Contact information ArcelorMittal Investor Relations | |
| General | +44 20 7543 1128 |
| Retail | +44 20 3214 2893 |
| SRI | +44 20 3214 2801 |
| Bonds/Credit | +33 171 921 026 investor.relations@arcelormittal.com |
| Contact information ArcelorMittal Corporate Communications | |
| Paul Weigh Tel: E-mail: | +44 20 3214 2419 press@arcelormittal.com |
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