Commercial Metals Company Announces Closing of Tax-Exempt Bond Financing with Proceeds of $150.0 Million

Rhea-AI Summary

Commercial Metals Company (NYSE: CMC) has successfully closed a tax-exempt bond financing deal worth $150.0 million through the West Virginia Economic Development Authority (WVEDA). The Solid Waste Disposal Facilities Revenue Bonds will bear interest at 4.625% per annum and mature in 2055. The proceeds will finance the construction of solid waste disposal facilities in Berkeley County, West Virginia.

Under the agreement, CMC will be responsible for semiannual interest payments and principal repayment upon maturity or earlier redemption. The company, which operates primarily in the United States and Central Europe, provides reinforcement solutions for the global construction sector, focusing on infrastructure, non-residential, residential, industrial, and energy projects.

Positive

• Secured $150.0 million in tax-exempt bond financing for facility expansion
• Favorable 4.625% interest rate in the current market environment
• Investment in waste disposal facilities demonstrates commitment to sustainability

Negative

• Long-term debt obligation extending to 2055
• Additional interest payment obligations will impact cash flow

Insights

Financial Bond Analyst

CMC secured $150M in tax-exempt bonds at 4.625% for waste facility construction in West Virginia, strengthening long-term infrastructure investment capabilities.

CMC has successfully closed a $150 million tax-exempt bond financing through the West Virginia Economic Development Authority. The solid waste disposal facilities revenue bonds carry a 4.625% interest rate with a 30-year maturity (2055), providing CMC with long-term, relatively low-cost capital for infrastructure development in Berkeley County.

This financing structure is particularly advantageous for CMC for several reasons. First, the tax-exempt nature of these bonds typically results in lower interest rates compared to traditional corporate debt. At 4.625%, this rate appears favorable in the current interest rate environment for a 30-year commitment. Second, the extended maturity aligns well with the long-term nature of infrastructure assets, matching liability duration with asset lifespan.

The bond proceeds will fund solid waste disposal facilities, which likely support CMC's core business of steel manufacturing and recycling operations. Such facilities are crucial for managing and processing manufacturing byproducts, potentially reducing environmental compliance costs and supporting sustainability initiatives.

This financing demonstrates CMC's ability to access diverse capital sources and leverage government partnerships for infrastructure investments. With the company committed to servicing the semiannual interest payments and eventual principal repayment, the structure suggests a strategic balancing of capital needs while maintaining financial flexibility for core operations in the construction solutions sector.

IRVING, Texas, May 15, 2025 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) ("CMC") announced today the closing of the previously announced sale of $150.0 million in original aggregate principal amount of Solid Waste Disposal Facilities Revenue Bonds (Commercial Metals Company Project), Series 2025 (the "Bonds"), issued by the West Virginia Economic Development Authority (the "WVEDA"). The sale of the Bonds provided proceeds of $150.0 million, which CMC has borrowed from the WVEDA pursuant to a loan agreement, and CMC will use such proceeds to finance a portion of the costs of the construction of solid waste disposal facilities located in Berkeley County, West Virginia.

The Bonds will bear interest at 4.625% per annum and mature in 2055. Pursuant to its agreement with the WVEDA, CMC will pay the debt service on the Bonds, including the semiannual interest payments on the outstanding principal of the Bonds, and will repay the principal of the Bonds upon maturity or earlier redemption or repurchase.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

About CMC
CMC is an innovative solutions provider helping build a stronger, safer, and more sustainable world. Through an extensive manufacturing network principally located in the United States and Central Europe, we offer products and technologies to meet the critical reinforcement needs of the global construction sector. CMC's solutions support early-stage construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission.

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SOURCE Commercial Metals Company

FAQ

What is the purpose of CMC's $150 million bond financing in 2025?

The $150 million bond financing will be used to fund the construction of solid waste disposal facilities in Berkeley County, West Virginia.

What is the interest rate and maturity date for CMC's 2025 tax-exempt bonds?

The bonds will bear interest at 4.625% per annum and mature in 2055, with semiannual interest payments required.

Who issued the tax-exempt bonds for Commercial Metals Company (CMC)?

The West Virginia Economic Development Authority (WVEDA) issued the Solid Waste Disposal Facilities Revenue Bonds for CMC.

What are CMC's payment obligations for the 2025 tax-exempt bonds?

CMC must make semiannual interest payments at 4.625% and repay the $150 million principal upon maturity in 2055 or earlier redemption.