AK Steel Corporation (AK Steel), a subsidiary of
AK Steel Holding Corporation
), announced the pricing of $30 million private offering as an
add-on notes to its outstanding $350 million aggregate principal
amount of 8.750% senior secured notes due 2018.
The add-on notes, which will mature on Dec 1, 2018, will be
wholly guaranteed by AK Holding on a senior basis and will be
secured by the holding company's total real property, plant and
equipment and its related proceeds. AK Steel will be paying
semi-annual interest on the add-on notes twice a year on Jun 1
and Dec 1.
The net proceeds from the issuance of add-on senior notes will
be utilized for general corporate purposes. Depending on
customary closing conditions, the offering is expected to close
on Jun 24, 2013.
Since the add-on notes are not registered under the Securities
Act of 1933 or the securities laws of any other jurisdiction, it
cannot be offered or sold in the U.S. or to any U.S. persons
except pursuant to an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
However, it can be offered only to qualified institutional
customers following the Rule 144A under the Securities Act and to
non-U.S. persons outside the U.S. under Regulation S of the
Separately, AK Steel announced second quarter guidance on Jun
17, where it expects a loss between 33 and 38 cents as non-cash
tax expenses coupled with maintenance outage costs may dent its
bottom line. Analysts polled by Zacks are expecting a loss of 10
cents a share for the quarter.
AK Steel expects to take tax charges of roughly $11 million (or 8
cents a share) in the quarter related to a valuation allowance
for its deferred tax assets. In addition; the quarter's results
will include the impact of a planned maintenance outage at the
Middletown Works blast furnace. AK Steel expects to incur
maintenance outage costs of around $21 million in the second
quarter, an increase from $1 million in the first quarter.
Moreover, the company anticipates its average per-ton selling
price to slip roughly 1% in the second quarter from the first
quarter level of $1,062 per ton. The expected sequential decline
is partly triggered by lower spot market prices for carbon steel
products. However, AK Steel added that its spot market prices
have been favorable of late given a recent price hike of carbon
flat-rolled steel products.
AK Steel currently holds a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks
Kobe Steel Ltd.
Shiloh Industries Inc.
Angang Steel Company Limited
). While both Kobe Steel and Shiloh Industries hold a Zacks Rank
#1 (Strong Buy), Angang Steel retains a Zacks Rank #2 (Buy).
AK STEEL HLDG (AKS): Free Stock Analysis
ANGANG STEEL LT (ANGGY): Get Free Report
KOBE STEEL-ADR (KBSTY): Get Free Report
SHILOH INDS INC (SHLO): Get Free Report
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