Bloomberg News

U.S. Steel Raises $400 Million With Offering of 10-Year Bonds

March 12, 2012

U.S. Steel Corp. (X), the country’s largest producer of the metal by volume, sold $400 million of 10-year bonds, according to a person familiar with the offering.

The 7.5 percent notes priced at par to yield 548 basis points more than Treasuries of similar maturity, said the person, who declined to be identified.

U.S. Steel, rated two levels below investment grade at BB by Standard & Poor’s, is taking advantage of a rally in risky assets that’s driven down the yield on its debt to refinance another bond before it comes due next year. The Pittsburgh-based company intends to use proceeds to pay off its $300 million of 5.65 percent notes due 2013, S&P said today in a statement.

The yield on U.S. Steel’s $600 million of 7.375 percent notes due in April 2020 has fallen to 6.9 percent from as high as 9.4 percent in October, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Average yields on speculative-grade bonds, rated lower than BBB- by S&P and below Baa3 at Moody’s Investors Service, have declined to 7.6 percent as of March 9 from as high as 10.2 percent on Oct. 4.

To contact the reporter on this story: Zeke Faux at zfaux@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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