Item 1.01 Entry into a Material Definitive Agreement
Background
On January 29, 2020, AK Steel Corporation (the "Company") and Cleveland-Cliffs
Inc. ("Cliffs") announced that, in connection with the previously announced
exchange offers by Cliffs and consent solicitations (the "Consent
Solicitations") by the Company, the Company had received, on January 28, 2020,
the requisite consents to adopt the proposed amendments (the "Proposed
Amendments") to amend (i) the indenture, dated May 11, 2010 (the "Base
Indenture"), among the Company, AK Steel Holding Corporation, as parent
guarantor ("Parent"), and U.S. Bank National Association, as trustee (the
"Trustee"), as supplemented by that certain Seventh Supplemental Indenture,
dated March 23, 2017 (the "Seventh Supplemental Indenture" and, together with
the Base Indenture, the "2027 Notes Indenture"), among the Company, Parent, AK
Tube LLC ("AK Tube"), AK Steel Properties, Inc. ("AK Steel Properties") and
Mountain State Carbon, LLC ("MSC" and, together with AK Tube and AK Steel
Properties, the "Subsidiary Guarantors"), as subsidiary guarantors, and the
Trustee, governing the Company's 7.00% Senior Notes due 2027 (the "2027 Notes"),
and (ii) the Base Indenture, as supplemented by that certain Eighth Supplemental
Indenture, dated August 9, 2017 (the "Eighth Supplemental Indenture" and,
together with the Base Indenture, the "2025 Notes Indenture" and, together with
the Base Indenture and the 2027 Notes Indenture, the "Indentures"), among the
Company, Parent, the Subsidiary Guarantors, and the Trustee, governing the
Company's 6.375% Senior Notes due 2025 (the "2025 Notes" and, together with the
2027 Notes, the "Notes"). The Consent Solicitations were conducted pursuant to
the terms of, and subject to the conditions set forth in, the offering
memorandum and consent solicitation statement, dated January 14, 2020 (as
amended or supplemented from time to time, the "Offering Memorandum and Consent
Solicitation Statement"). As previously announced, Cliffs and Parent entered
into an agreement and plan of merger to provide for a subsidiary of Cliffs to
merge with and into Parent, with Parent surviving as a wholly owned subsidiary
of Cliffs (the "Merger").
Entry into Supplemental Indentures
On January 29, 2020, the Company and the Trustee entered into the Ninth
Supplemental Indenture with respect to the 2027 Notes Indenture (the "Ninth
Supplemental Indenture") and the Tenth Supplemental Indenture with respect to
the 2025 Notes Indenture (the "Tenth Supplemental Indenture" and, together with
the Ninth Supplemental Indenture, the "Supplemental Indentures") giving effect
to the Proposed Amendments. The Proposed Amendments to the Indentures
implemented by the Supplemental Indentures will become operative with respect to
the Notes only at such time as the following conditions are satisfied or
otherwise waived, if applicable, by Cliffs or the Company: (1) Cliffs shall have
delivered to The Depository Trust Company for the Eligible Holders (as defined
in the Offering Memorandum and Consent Solicitation Statement) of such Notes the
aggregate amount to be paid to such Eligible Holders as Consent Payments (as
defined in the Offering Memorandum and Consent Solicitation Statement), upon the
terms and subject to the conditions in the Offering Memorandum and Consent
Solicitation Statement in respect of the consents deemed validly delivered and
not revoked thereunder, and Cliffs or the Company shall have notified the
Trustee in writing that such delivery has been made, which condition cannot be
waived by Cliffs or the Company, (2) the Notes that are validly tendered (and
not validly withdrawn) have been accepted for exchange by Cliffs in accordance
with the terms of the Offering Memorandum and Consent Solicitation Statement,
and (3) the other conditions to the Consent Solicitations set forth in the
Offering Memorandum and Consent Solicitation Statement, including the
consummation the Merger, have been satisfied. The condition as to the
consummation of the Merger may not be waived by either Cliffs or the Company.
The Proposed Amendments delete in their entirety the following covenants from
the applicable Indenture with respect to the applicable series of the Notes:
• Section 4.05 of the Base Indenture ("Restrictions on the Activities of the
Parent Guarantor");
• Section 5.01 of the Base Indenture ("When Company and Parent Guarantor May
Merge, Etc.");
• Section 6.03 of the Base Indenture ("Reports by the Company");
• Section 7.01(c) of the Base Indenture ("Events of Default");
• Section 7.01(d) of the Base Indenture ("Events of Default");
• Section 7.01(e) of the Base Indenture ("Events of Default");
• Section 4.01 of the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture ("Redemption Upon Change of Control");
• Section 5.01 of the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture ("Limitation On Liens");
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• Section 5.02 of the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture ("Limitation on Subsidiary Debt");
• Section 5.03 of the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture ("Limitation on Sale and Leaseback"); and
• Section 7.02 of the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture ("Defaults and Remedies - Additional Provisions").
In addition, the Proposed Amendments reduce the minimum notice period required
to optionally redeem the Notes by amending Section 3.02 ("Notice of Redemption;
Partial Redemptions") of the Base Indenture by replacing references to "30 days"
with "three Business Days."
The foregoing descriptions of the Ninth Supplemental Indenture and the Tenth
Supplemental Indenture do not purport to be complete and are qualified in their
entirety by reference to the full text of the Ninth Supplemental Indenture and
the Tenth Supplemental Indenture, respectively, which are filed as Exhibits 4.1
and 4.2, respectively, to this Current Report on Form 8-K. The Ninth
Supplemental Indenture and the Tenth Supplemental Indenture are incorporated by
reference into this Item 1.01.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
4.1 Ninth Supplemental Indenture, dated January 29, 2020, between AK
Steel Corporation and U.S. Bank National Association
4.2 Tenth Supplemental Indenture, dated January 29, 2020, between AK
Steel Corporation and U.S. Bank National Association
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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AK STEEL HOLDING CORPORATION 
