AK Steel Corporation (AK Steel), a subsidiary of
AK Steel Holding Corporation
), has completed exchange offering of up to $380 million in
aggregate principal amount of its 8.75% senior secured notes due
2018 for an equal aggregate principal amount of its registered
8.75% senior secured notes due 2018 (the New Notes).
The initial notes were not registered under the Securities Act
of 1933, as amended. The exchange offer of the initial
notes expired on Aug 28, 2013.
All of the initial notes were submitted for exchange offering. AK
Steel accepted the notes validly tendered for exchange and not
withdrawn following the exchange offer
The new notes that are to be exchanged for the initial notes hold
substantially similar terms as that of the initial notes apart
from the clauses that new notes are registered under the
Securities Act of 1933, as amended, have no transfer restrictions
under the federal securities laws, no registration rights and no
rights to additional interest.
The exchange offer was made following the Registration Rights
Agreements entered by AK Steel and AK Holding at the time of the
issuance of the initial notes on Nov 20, 2012, and Jun 24, 2013.
The objective of the offer was to enable initial notes holders to
exchange their initial notes for new notes that are not subject
to restrictions. However, AK Steel did not get any proceeds from
AK Steel posted narrower loss in second-quarter 2013. The company
recorded a net loss of $40.4 million or 30 cents a share in the
quarter, down roughly 94% from a loss of $724.2 million or $6.55
a share a year-ago. Barring one-time items (tax charges related
to a valuation allowance for deferred tax assets), AK Steel's
loss for the quarter was 15 cents per share, narrower than the
Zacks Consensus Estimate of a loss of 35 cents.
Revenues fell 8.7% year over year to $1,404.5 million in the
reported quarter due to lower shipments to carbon spot and
electrical steel markets. It missed the Zacks Consensus Estimate
of $1,414 million.
AK Steel is expected to benefit from the strength in the
automotive market and higher shipment of carbon steel products to
automakers. The company is also investing to internally procure
about half of its iron ore and coal requirements.
However, we remain concerned about the challenging operating
backdrop in overseas markets, softness in the construction market
and the weak steel pricing environment. Moreover, maintenance
outage associated with the Ohio blast furnace will weigh on its
third quarter results.
AK Steel currently carries a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks
Nippon Steel & Sumitomo Metal Corp.
Kobe Steel Ltd.
). While Nippon Steel retains a Zacks Rank #1 (Strong Buy), both
Kobe Steel and Ternium carry a Zacks Rank #2 (Buy).
AK STEEL HLDG (AKS): Free Stock Analysis
KOBE STEEL-ADR (KBSTY): Get Free Report
NIPPON STEEL CP (NSSMY): Get Free Report
TERNIUM SA-ADR (TX): Free Stock Analysis
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