Item 1.01. Entry into a Material Definitive Agreement
On October 9, 2020, Steel Dynamics, Inc. (the "Company") completed the offering
and sale (the "Offering") of $350 million aggregate principal amount of its
1.650% Notes due 2027 (the "2027 Notes") and $400 million aggregate principal
amount of its 3.250% Notes due 2050 (the "2050 Notes," and together with the
2027 Notes, the "Notes"). The Notes were offered pursuant to the prospectus
supplement, dated October 7, 2020 (the "Prospectus Supplement"), to the
prospectus, dated December 4, 2019 (together with the Prospectus Supplement, the
"Prospectus"), which forms part of the Company's effective Registration
Statement on Form S-3 (Registration No. 333-235343) filed with the Securities
and Exchange Commission (the "SEC") on December 4, 2019, pursuant to which the
Notes were registered under the Securities Act of 1933, as amended.
The sale of the Notes was made pursuant to the terms of an Underwriting
Agreement, dated October 7, 2020 (the "Underwriting Agreement"), between the
Company and J.P. Morgan Securities LLC, BofA Securities, Inc., Morgan Stanley &
Co. LLC and PNC Capital Markets LLC, as representatives of the several
underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"). The Underwriting Agreement includes the terms and conditions of
the offer and sale of the Notes, indemnification and contribution obligations
and other terms and conditions customary in agreements of this type.
The Company sold the Notes to the Underwriters on October 9, 2020, and the
Company received net proceeds, after expenses and the underwriting discount, of
approximately $725 million. The Company plans to use the net proceeds from the
sale of the Notes for (i) the redemption of $350 million aggregate principal
amount of its 4.125% Senior Notes due 2025 (the "2025 Notes") and (ii) other
general corporate purposes, which may include, but are not limited to, working
capital, capital expenditures, advances for or investments in the Company's
subsidiaries, acquisitions, redemption and repayment of outstanding
indebtedness, and purchases of the Company's common stock.
The terms of the Notes are governed by an Indenture, dated as of December 4,
2019 (the "Base Indenture"), between the Company and Wells Fargo Bank, National
Association, as trustee (the "Trustee"), as supplemented by a Third Supplemental
Indenture, dated as of October 9, 2020 (the "Third Supplemental Indenture" and
together with the Base Indenture, the "Indenture"), between the Company and the
Trustee.
The Notes (i) will be the Company's senior unsecured obligations, (ii) will rank
equally in right of payment with all of the Company's existing and future senior
indebtedness, (iii) will be senior in right of payment to all of the Company's
future subordinated indebtedness, (iv) will be effectively subordinated to the
Company's secured indebtedness, if any, to the extent of the value of the assets
securing such indebtedness and (v) will be structurally subordinated to all
liabilities of any of the Company's subsidiaries.
Interest on the 2027 Notes will accrue at a rate of 1.650% per annum and is
payable semi-annually, in arrears, on April 15 and October 15 of each year,
commencing April 15, 2021. Interest on the 2050 Notes will accrue at a rate of
3.250% per annum and is payable semi-annually, in arrears, on April 15 and
October 15 of each year, commencing April 15, 2021. Interest will be computed on
the basis of a 360-day year composed of twelve 30-day months. The 2027 Notes
will mature on October 15, 2027, unless earlier redeemed. The 2050 Notes will
mature on October 15, 2050, unless earlier redeemed.
Commencing on August 15, 2027 (two months prior to their maturity date), the
Company may redeem the 2027 Notes, in whole, or from time to time in part, at
the option of the Company at any time, at a redemption price equal to 100% of
the principal amount of the 2027 Notes being redeemed plus accrued and unpaid
interest, if any, to the redemption date. Commencing on April 15, 2050 (six
months prior to their maturity date), the Company may redeem the 2050 Notes, in
whole, or from time to time in part, at the option of the Company at any time,
at a redemption price equal to 100% of the principal amount of the 2050 Notes
being redeemed plus accrued and unpaid interest, if any, to the redemption date.
Prior to August 15, 2027 (two months prior to their maturity date) in the case
of the 2027 Notes and prior to April 15, 2050 (six months prior to their
maturity date) in the case of the 2050 Notes, the Notes of either or both series
will be redeemable, at the Company's option, at any time in whole, or from time
to time in part, at a price equal to the greater of: (a) 100% of the principal
amount of such Notes to be redeemed; and (b) the sum of the present values of
the Remaining Scheduled Payments (as defined in the Third Supplemental
Indenture) thereon that would be due if the Notes matured on the applicable Par
Call Date (as defined in the Third Supplemental Indenture), discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined in the Third Supplemental
Indenture) plus 20 basis points in the case of the 2027 Notes and 30 basis
points in the case of the 2050 Notes, plus, in either case, accrued and unpaid
interest, if any, on the principal amount being redeemed to the date of
redemption.
Upon the occurrence of a Change of Control Triggering Event (as defined in the
Third Supplemental Indenture) with respect to a series of Notes, unless the
Company has exercised its right to redeem such Notes in full by giving
irrevocable notice to the Trustee in accordance with the Indenture, each holder
of such series of Notes will have the right to require the Company to purchase
all or a portion of such holder's Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase.
The Indenture contains covenants that, among other things, limit the Company's
ability to incur liens securing indebtedness, to engage in certain sale and
leaseback transactions with respect to certain properties and to sell all or
substantially all of the Company's assets or merge or consolidate with or into
other companies. Each series of Notes is a new issue of securities for which
there is currently no established trading market. The Company does not intend to
apply for a listing of the Notes on any national securities exchange.
The Underwriters and their respective affiliates are full service financial
institutions engaged in various activities, which may include securities
trading, commercial and investment banking, financial advisory, investment
management, investment research, principal investment, hedging, financing and
brokerage activities. Certain of the Underwriters and their respective
affiliates have engaged in, and may in the future engage in, commercial and
investment banking and other commercial dealings in the ordinary course of
business with the Company or its affiliates. In particular, the affiliates of
some of the Underwriters are participants in the Company's unsecured revolving
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference in its entirety.
Item 8.01. Other Events.
On October 9, 2020, the Company issued a press release titled "Steel Dynamics
Announces Completion of Note Offering and Redemption Call for its 4.125 % Senior
Notes Due 2025." A copy of that press release is attached hereto as Exhibit 99.1
and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Attached hereto, or incorporated herein by reference, are agreements and other
information related to the Offering pursuant to the Registration Statement on
Form S-3 (Registration No. 333-235343) , filed with the SEC. The exhibits are
expressly incorporated herein by reference.
Exhibit Number Description
1.1 Underwriting Agreement, dated October 7, 2020, between Steel Dynamics,
Inc. and J.P. Morgan Securities LLC, BofA Securities, Inc., Morgan
Stanley & Co. LLC and PNC Capital Markets LLC, as representatives of the
several underwriters named therein (filed herewith).
4.1 Indenture, dated as of December 4, 2019, between Steel Dynamics, Inc.
and Wells Fargo Bank, National Association, as Trustee (incorporated
herein by reference to Exhibit 4.1 to the Registration Statement on
Form S-3 (Registration No. 333-235343) of Steel Dynamics, Inc., dated
December 4, 2019).
4.2 Third Supplemental Indenture, dated as of October 9, 2020, between
Steel Dynamics, Inc. and Wells Fargo Bank, National Association, as
Trustee (filed herewith).
4.3 Form of 1.650% Notes due 2027 (included in Exhibit 4.2).
4.4 Form of 3.250% Notes due 2050 (included in Exhibit 4.2).
5.1 Opinion of Barrett McNagny LLP (filed herewith).
23.1 Consent of Barrett McNagny LLP (included in Exhibit 5.1).
99.1 A press release dated October 9, 2020, titled "Steel Dynamics
Announces Completion of Note Offering and Redemption Call for its 4.125%
Senior Notes Due 2025" (filed herewith).
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