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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Steel Dynamics, Inc.    STLD

STEEL DYNAMICS, INC.

(STLD)
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STEEL DYNAMICS INC : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Other Events, Financial Statements and Exhibits (form 8-K)

10/09/2020 | 02:08pm EST

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).
104              Cover Page Interactive Data File - the cover page interactive data file
                 does not appear in the Interactive Data File because its XBRL tags are
                 embedded within the Inline XBRL document.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2020 9 553 M - -
Net income 2020 537 M - -
Net Debt 2020 1 794 M - -
P/E ratio 2020 15,7x
Yield 2020 2,51%
Capitalization 8 358 M 8 358 M -
EV / Sales 2020 1,06x
EV / Sales 2021 0,90x
Nbr of Employees 8 385
Free-Float 75,0%
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Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 40,40 $
Last Close Price 39,73 $
Spread / Highest target 25,8%
Spread / Average Target 1,69%
Spread / Lowest Target -19,5%
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Managers and Directors
NameTitle
Mark D. Millett President, Chief Executive Officer & Director
Keith E. Busse Non-Independent Non-Executive Chairman
Theresa E. Wagler CFO, Principal Accounting Officer & Executive VP
Robert E. Francis Chief Information Officer & Vice President
Richard P. Teets Director
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