U.S. Steel whispering $750 million eight-year notes at 7%-7¼%; pricing expected Tuesday

By Paul A. Harris

Portland, Ore., July 31 – United States Steel Corp. is expected to price $750 million of eight-year senior notes (existing ratings Caa1/B) on Tuesday, according to market sources.

Initial guidance has the bonds coming to yield 7% to 7¼%.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Barclays, Morgan Stanley & Co. LLC, PNC Capital Markets, Wells Fargo Securities LLC and Goldman Sachs & Co. are the joint bookrunners for the public offering.

The notes come with three years of call protection and feature a three-year 35% equity clawback.

The Pittsburgh-based producer of flat-rolled and tubular steel products plans to use the proceeds, together with cash on hand, to redeem its 7% senior notes due 2018, as well as its 6 7/8% senior notes due 2021 and its 7½% senior notes due 2022.

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