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Get filing alertsWorthington Steel raises $1.4B in debt to fund Klöckner acquisition
Filed June 2, 2026 · Period ending June 1, 2026 · ~1 min read
Key Changes
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$700M senior secured notes issued at 7.750% due 2033, plus $700M term loan B facility at SOFR+4.00%, both secured by substantially all company assets to finance the Klöckner acquisition closing June 3, 2026.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Combined $1.4B debt proceeds will fund Klöckner purchase consideration, shareholder loans, minority compensation, repay existing debt at both companies, and cover transaction costs.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Notes include special mandatory redemption at par plus accrued interest if Klöckner acquisition fails to close by March 12, 2027, protecting noteholders from execution risk.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Debt structure shifted during pricing: notes reduced from $900M to $700M while term loan increased from $500M to $700M, maintaining total $1.4B but changing the mix.
Exhibit 99.1 view on EDGAR → -
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Existing revolving credit facility amended to expand collateral to substantially all personal property assets, aligning with new term loan security arrangements.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
Worthington Steel closed $1.4 billion in acquisition financing on June 1, 2026, comprising $700 million in 7.750% senior secured notes due 2033 and a $700 million term loan B facility at SOFR plus 4.00%. Both instruments are secured by substantially all company assets and guaranteed by present and future restricted subsidiaries.
The proceeds fund the Klöckner acquisition expected to close June 3, 2026, including purchase consideration, shareholder loans to Klöckner, minority shareholder compensation, repayment of existing debt at both companies, and transaction costs. Retail holders should note the significant leverage being added to the balance sheet.
The 7.750% coupon reflects current market pricing for secured acquisition debt, while the term loan's SOFR-based floating rate creates interest rate exposure. The notes include a special mandatory redemption provision requiring full repayment at par plus accrued interest if the Klöckner acquisition fails to close by March 12, 2027, which protects creditors but creates execution pressure on management. The debt structure was adjusted during pricing, reducing notes from $900 million to $700 million while increasing the term loan by the same amount, suggesting investor preference for the floating-rate instrument. The company's existing revolving credit facility was amended to align collateral arrangements across all facilities.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On June 1, 2026, the Company entered into a term loan credit agreement (the “Credit Agreement”), among the Company, as borrower, the lenders from time to time party thereto, and Wells Fargo, National Association, as administrative agent.
The Credit Agreement provides for a seven-year senior secured term loan B credit facility in aggregate principal amount of $700,000,000 (the “Term Loan Facility” and the term loans thereunder, the “Term Loans”), the proceeds of which shall be used, among other things, to finance the Klöckner Acquisition, to pay costs, fees and expenses related thereto and any hedging arrangements in connection therewith and for general working capital purposes.
The company entered a seven-year $700 million term loan B facility with Wells Fargo as administrative agent. The term loans bear interest at either a base rate plus 3.00% or term SOFR plus 4.00%, with SOFR subject to a 0.00% floor. The facility is secured by substantially all company assets and contains customary covenants but no financial covenant.
Added in current filing · verify on EDGAR →
The Company intends to use the net proceeds from the Note Offering, together with borrowings under the Term Loan Facility (as defined below) and cash on hand, to fund the consideration payable in connection with the Klöckner Acquisition, to repay certain existing indebtedness of the Company and Klöckner, to pay transaction fees and expenses related thereto and for general working capital purposes.
The combined $1.4 billion in debt proceeds, along with cash on hand, will fund the Klöckner acquisition, repay existing debt of both companies, cover transaction costs, and provide working capital. This represents significant leverage being added to finance the acquisition.
Event · Item 8.01 — Other Events
Worthington Steel announced pricing of a note offering on May 28, 2026.
Added in current filing · verify on EDGAR →
On May 28, 2026, the Company issued a press release announcing the pricing of the Note Offering.
The company disclosed that it priced a note offering on May 28, 2026. The 8-K does not provide details on the offering size, interest rate, maturity, or use of proceeds; those details would typically be in the referenced press release exhibit.
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
Worthington Steel intends to use the net proceeds from the Offering, together with borrowings under a new term loan credit facility, (i) to fund the consideration and other payments in connection with Worthington Steel’s pending acquisition (the “Kloeckner Acquisition”) of Kloeckner & Co SE (“Kloeckner”), (ii) to fund loans to Kloeckner pursuant to a shareholder loan, (iii) to fund share purchases and other compensation to remaining minority Kloeckner shareholders in connection with the Kloeckner Acquisition, (iv) to pay transaction fees and expenses related to the foregoing, (v) to repay certain existing indebtedness of Worthington Steel and Kloeckner and (vi) for general working capital purposes of Worthington Steel and its subsidiaries.
Proceeds will primarily fund the Kloeckner acquisition, including purchase consideration, shareholder loans, minority shareholder compensation, transaction fees, and repayment of existing debt at both companies. The acquisition is expected to close on June 3, 2026, within three business days of the notes offering closing.
Added in current filing · view on EDGAR →
If the Kloeckner Acquisition is not consummated by March 12, 2027 (or, in certain circumstances, ten business days thereafter) or upon the occurrence of certain other events, the Notes will be subject to a special mandatory redemption at a price equal to 100% of the issue price of the Notes, plus accrued and unpaid interest to, but not including, the date of the special mandatory redemption.
The notes include a special mandatory redemption feature if the Kloeckner acquisition fails to close by March 12, 2027 (or up to ten business days later in certain cases). In that event, noteholders would receive 100% of the issue price plus accrued interest. This protects investors if the acquisition does not proceed as planned.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 21, 2026 · How we verify