US Steel secures funding for Big River expansion

Pittsburgh-based United States Steel Corp. has announced the closing of $240 million in unsecured Arkansas Development Finance Authority environmental improvement revenue bonds, which carry a “green bond” designation.

The green bonds have a coupon rate of 5.7 percent and carry a final maturity of 2053. “Under the agreement with the Arkansas bond issuer, U. S. Steel will pay semiannual interest,” the steel producer says.

The company will use the proceeds from the green bonds to help fund work related to its electric arc furnace (EAF) flat-rolled steelmaking facility, known as Big River 2 (BR2), that is under construction near Osceola, Arkansas. “The facility will recycle, refine and process scrap steel into finished steel products,” U.S. Steel says.

“The $240 million green bonds transaction that closed today, together with $290 million of green bonds issued in 2022, concludes the financing available through the Arkansas Development Finance Authority for BR2,” U.S. Steel president and CEO David B. Burritt says.

“The opportunistic transactions completed in 2022 and 2023 carried a weighted average coupon of 5.56 percent with 30-year maturities. Our strong balance sheet and liquidity provide a solid foundation to continue to execute on our Best for All strategy.”

Construction of BR2 is expected to be complete next year. Once operating, it “will be the most-advanced steelmaking facility in North America, featuring two EAFs, with a total 3 million tons per year of advanced steelmaking capability, a state-of-the-art endless casting and rolling line and advanced finishing capabilities,” U.S. Steel says.

BR2 is expected to operate with up to 70 percent to 80 percent fewer greenhouse gas emissions compared to a blast furnace/basic oxygen furnace configuration and supports the company’s sustainability commitments, according to U.S. Steel.

BofA Securities, Fifth Third Securities, Truist Securities, Wells Fargo Securities, Barclays, Citigroup, Crews & Associates, Goldman Sachs & Co., J.P. Morgan Securities and Morgan Stanley & Co. acted as underwriters for the green bonds.