United States Steel Corporation announced the closing of $240 million unsecured Arkansas Development Finance Authority environmental improvement revenue bonds, which carry a green bond designation (the “Green Bonds”).
The Green Bonds, issued through Arkansas Development Finance Authority, have a coupon rate of 5.70% and carry a final maturity of 2053. Under the agreement with the Arkansas bond issuer, U. S. Steel will pay semiannual interest.
The Company will use the proceeds from the Green Bonds to partially fund work related to its new technologically advanced flat rolled steelmaking facility, Big River 2 (“BR2”), currently under construction near Osceola, Arkansas. The facility will recycle, refine, and process scrap steel into finished steel products.
“The $240 million Green Bonds transaction that closed today, together with $290 million of Green Bonds issued in 2022 concludes the financing available through the Arkansas Development Finance Authority for BR2,” commented U. S. Steel President and Chief Executive Officer David B. Burritt. “The opportunistic transactions completed in 2022 and 2023 carried a weighted average coupon of 5.56% with 30 year maturities. Our strong balance sheet and liquidity provide a solid foundation to continue to execute on our Best for All® strategy.”
Construction of BR2 is expected to be completed in 2024, and once complete will be the most advanced steelmaking facility in North America, featuring two EAFs, with a total three million tons per year of advanced steelmaking capability, a state-of-the-art endless casting and rolling line and advanced finishing capabilities. BR2 is expected to operate with up to 70-80% fewer greenhouse gas emissions compared to the traditional integrated steelmaking approach and directly support the Company’s sustainability commitments.
BofA Securities, Fifth Third Securities, Truist Securities, Wells Fargo Securities, Barclays, Citigroup, Crews & Associates, Goldman Sachs & Co., J.P. Morgan Securities, and Morgan Stanley & Co. acted as underwriters for the Green Bonds.
