Commercial Metals Company (CMC) recently announced the closing of a $2,000 million senior notes offering, consisting of $1,000 million in aggregate principal amount of 5.75% senior notes due 2033 and $1,000 million in aggregate principal amount of 6.00% senior notes due 2035. These notes are senior unsecured obligations and rank equally with all of CMC's existing and future senior unsecured indebtedness.
CMC intends to use the net proceeds from the sale of the notes to fund the purchase price for the company's previously announced acquisition of all of the issued and outstanding equity securities of entities that own Foley Products Company, LLC (the "Foley Acquisition") and transaction-related fees and expenses, as well as for general corporate purposes.
The gross proceeds from the issuance of the notes were deposited into an escrow account at the closing of the offering, pending the consummation of the Foley Acquisition. If the Foley Acquisition is not completed on or prior to October 15, 2026, or if the securities purchase agreement with respect to the Foley Acquisition is terminated before that date, CMC will be required to redeem all of the notes at a redemption price equal to 100% of the initial issue price of the notes plus accrued and unpaid interest.
The notes were offered only to qualified institutional buyers and certain non-U.S. persons, and have not been and will not be registered under the securities laws of any other jurisdiction.
In terms of CMC's financial performance, the press release did not provide specific figures or metrics. However, it's clear that the company is leveraging the notes offering to fund a significant acquisition and related expenses, indicating a strategic move to expand its operations and potentially enhance its financial position. Today the company's shares have moved 2.0% to a price of $63.88. For the full picture, make sure to review COMMERCIAL METALS Co's 8-K report.
