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

Rhea-AI Summary

Commercial Metals Company (NYSE: CMC) has announced the pricing of $150.0 million in Solid Waste Disposal Facility Revenue Bonds through the West Virginia Economic Development Authority. The bonds, priced at 100% of principal value, will bear interest at 4.625% per annum until May 15, 2032, with final maturity in 2055. The proceeds will finance the construction of solid waste disposal facilities in Berkeley County, West Virginia. The bonds are being issued under a Securities Act exemption and cannot be offered or sold within the United States without registration or applicable exemption. CMC, primarily operating in the U.S. and Central Europe, provides reinforcement solutions for the global construction sector, focusing on infrastructure, non-residential, residential, industrial, and energy projects.

Positive

• Secured $150 million in tax-exempt bond financing for facility construction
• Favorable 4.625% interest rate locked until 2032
• Investment in waste disposal infrastructure supports environmental sustainability initiatives

Negative

• Long-term debt obligation extending to 2055
• Restricted bond trading capabilities due to Securities Act limitations

Insights

Financial Analyst

CMC secures $150M tax-exempt bond financing at 4.625% for waste disposal facilities, demonstrating strong capital management.

This $150 million tax-exempt bond issuance represents a strategic financing decision by Commercial Metals Company to fund solid waste disposal facilities in Berkeley County, West Virginia. The bonds carry a 4.625% interest rate through 2032 with final maturity in 2055, creating a long-term, stable funding structure for environmental infrastructure.

The tax-exempt status of these bonds offers significant advantages compared to traditional corporate debt, as such instruments typically feature lower interest rates, reducing the company's cost of capital for this specific project. This transaction demonstrates CMC's ability to diversify its capital sources by accessing specialized financing instruments aligned with environmental purposes.

The 30-year maturity timeline aligns financing obligations with the expected useful life of industrial infrastructure assets. For metals companies, solid waste disposal facilities represent essential environmental compliance infrastructure that supports sustainable manufacturing operations and regulatory requirements.

While this financing adds $150 million to CMC's obligations, the specialized nature and tax advantages of this particular debt structure represent thoughtful capital allocation. By securing dedicated environmental infrastructure funding through this tax-advantaged mechanism, CMC preserves other financial resources for alternative strategic investments or operational needs.

This transaction reflects sophisticated treasury management and the company's continued ability to access capital markets effectively, even for specialized environmental infrastructure projects.

IRVING, Texas, May 6, 2025 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) ("CMC") announced today the pricing of $150.0 million in original aggregate principal amount of Solid Waste Disposal Facility Revenue Bonds (Commercial Metals Company Project), Series 2025 (the "Bonds"), to be issued through the West Virginia Economic Development Authority (the "WVEDA"). The Bonds were sold at a price equal to 100% of the principal amount thereof, and the sale of the Bonds is expected to provide proceeds of $150.0 million. CMC intends to borrow the proceeds from the sale of the Bonds from the WVEDA pursuant to a loan agreement and 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 for an initial Term Rate Period ending with a mandatory tender for purchase on May 15, 2032. The Bonds mature in 2055.

The Bonds will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or under any state or other securities laws, and the Bonds will be issued pursuant to an exemption therefrom, and may not be offered or sold within the United States (the "U.S."), or to or for the account or benefit of any U.S. Person, absent registration or an applicable exemption from registration requirements.

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. This press release is being issued pursuant to, and in accordance with, Rule 135c under the Securities Act.

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.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws with respect to CMC's expectations concerning the bond financing described above, the estimated cost of construction of CMC's previously announced micro mill in Berkeley County, West Virginia and incentives related to such project. The statements in this release that are not historical statements, are forward-looking statements. These forward-looking statements can generally be identified by phrases such as CMC or its management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans or intentions.

CMC's forward-looking statements are based on management's expectations and beliefs as of the time this news release was prepared. Although CMC believes that its expectations are reasonable, CMC can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, CMC undertakes no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from CMC's expectations include those described in its filings with the Securities and Exchange Commission, including, but not limited to, in Part I, Item 1A, "Risk Factors" of CMC's annual report on Form 10-K for the fiscal year ended August 31, 2024 and Part II, Item 1A, "Risk Factors" of CMC's quarterly report on Form 10-Q for the quarter ended February 28, 2025, as well as the following: changes in economic conditions which affect demand for CMC's products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing CMC's inventory values due to declines in commodity prices or reducing the profitability of downstream contracts within CMC's vertically integrated steel operations due to rising commodity pricing; excess capacity in CMC's industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; the impact of geopolitical conditions, including political turmoil and volatility, regional conflicts, terrorism and war on the global economy, inflation, energy supplies and raw materials; increased attention to environmental, social and governance ("ESG") matters, including any targets or other ESG, environmental justice or regulatory initiatives; operating and startup risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of CMC's investments; impacts from global public health crises on the economy, demand for CMC's products, global supply chain and on CMC's operations; compliance with and changes in existing and future laws, regulations and other legal requirements and judicial decisions that govern CMC's business, including increased environmental regulations associated with climate change and greenhouse gas emissions; involvement in various environmental matters that may result in fines, penalties or judgments; evolving remediation technology, changing regulations, possible third-party contributions, the inherent uncertainties of the estimation process and other factors that may impact amounts accrued for environmental liabilities; potential limitations in CMC's or its customers' abilities to access credit and non-compliance with their contractual obligations, including payment obligations; activity in repurchasing shares of common stock under CMC's share repurchase program; financial and non-financial covenants and restrictions on the operation of CMC's business contained in agreements governing CMC's debt; CMC's ability to successfully identify, consummate and integrate acquisitions and realize any or all of the anticipated synergies or other benefits of acquisitions; the effects that acquisitions may have on CMC's financial leverage; risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third-party consents and approvals; lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; the impact of goodwill or other indefinite-lived intangible asset impairment charges; the impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including changes to current trade regulations, such as Section 232 trade tariffs and quotas, tax legislation and other regulations which might adversely impact CMC's business; availability and pricing of electricity, electrodes and natural gas for mill operations; CMC's ability to hire and retain key executives and other employees; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; information technology interruptions and breaches in security; CMC's ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which CMC exerts little influence, including scrap metal, energy and insurance; unexpected equipment failures; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks, including those related to the PSG litigation and other legal proceedings; risk of injury or death to employees, customers or other visitors to CMC's operations; and civil unrest, protests and riots.

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SOURCE Commercial Metals Company

FAQ

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

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

What are the key terms of CMC's 2025 tax-exempt bonds?

The bonds bear 4.625% interest until May 15, 2032, are priced at 100% of principal value, and mature in 2055.

Where will CMC's new waste disposal facilities be located?

The facilities will be located in Berkeley County, West Virginia.

What is Commercial Metals Company's (CMC) main business focus?

CMC provides reinforcement solutions for the global construction sector, operating primarily in the United States and Central Europe.

Are CMC's 2025 tax-exempt bonds available for public trading?

No, the bonds are not registered under the Securities Act and cannot be offered or sold within the U.S. without registration or applicable exemption.