- Cliffs Natural Resources (CLF -4.1%) is reiterated with a Sell rating at Deutsche Bank, with a reduced $1 stock price target cut from $1.50, citing potential downside risks to its base case iron ore outlook and unsustainable debt levels.
- "While a successful execution of recently announced debt exchange offer could be a short-term catalyst, it may not alter medium-term solvency concerns," Deutsche Bank analyst Jorge Beristain writes.
- A fully-successful exchange could reduce CLF's debt by $925M and generate ~$40M/year in savings, but the company's net debt to EBITDA still would be ~11x, Beristain calculates; also, he does not expect a fully subscribed exchange offer, believing the offering will be less than 50% subscribed.