Yahoo Finance U.S. Steel (X) Closes Financing of $240M for Big River 2
United States Steel Corporation X recently closed $240 million of Green Bond-designated unsecured Arkansas Development Finance Authority environmental improvement revenue bonds. The Arkansas Development Finance Authority issued Green Bonds that had a coupon rate of 5.70% with a final maturity of 2053. U. S. Steel will pay semi-annual interest under the terms of the deal with the Arkansas bond issuer.
The proceeds from the Green Bonds will be used to partly fund the development of the company's new technologically advanced flat-rolled steelmaking facility, Big River 2 ("BR2"), which is now under construction near Osceola, AR. Scrap steel will be recycled, refined and processed into final steel products at the plant.
This $240 million Green Bonds transaction completes the financing for BR2 accessible through the Arkansas Development Finance Authority, together with the $290 million Green Bonds issued in 2022. The 2022 and 2023 opportunistic transactions have 30-year maturities with a weighted average coupon of 5.56%.
BR2's construction is expected to end in 2024. The most advanced steelmaking facility in North America will include two EAFs with a combined annual production capacity of 3 million tons of advanced steel, an advanced endless casting and rolling line, and cutting-edge finishing capabilities. Compared to the conventional integrated steelmaking approach, BR2 is anticipated to run with up to 70–80% lower greenhouse gas emissions, directly supporting the company's sustainability ambitions.
Shares of U.S. Steel have lost 10.8% over the past year against the industry’s rise of 4.5%.
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On its first-quarter call, U.S. Steel said that its focus on being the best partner for its customers through the best operations has boosted market share gains, which it expects to continue through 2023. It expects to deliver stronger second-quarter results on higher steel prices.
United States Steel Corporation Price and Consensus
United States Steel Corporation price-consensus-chart | United States Steel Corporation Quote
Zacks Rank & Key Picks
U.S. Steel currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks to consider in the basic materials space include L.B. Foster Company FSTR, Nucor Corporation NUE and Linde plc LIN. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
L.B. Foster currently carries a Zacks Rank #1. The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days.
L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR has gained around 2% in a year.
Nucor currently sports a Zacks Rank #2 (Buy). NUE’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 10.8% on average. NUE has rallied around 10.8% in a year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have gained roughly 14% in the past year.
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