Long-term Debt and Other Financing

The Company’s debt balances, including current portions, were as follows:



	September 30, 2014			December 31, 2013
Credit Facility	$	560.0		$	90.0
8.75% Senior Secured Notes due December 2018	380.0			380.0
5.00% Exchangeable Senior Notes due November 2019 (effective rate of 10.8%)	150.0			150.0
7.625% Senior Notes due May 2020	529.8			529.8
7.625% Senior Notes due October 2021	430.0			—
8.375% Senior Notes due April 2022	290.2			290.2
Industrial Revenue Bonds due 2014 through 2030	99.5			100.1
Unamortized debt (discount) premium, net	(32.9		)	(33.1		)
Total debt	2,406.6			1,507.0
Less:
Current portion of long-term debt	0.2			0.8
Total long-term debt	$	2,406.4		$	1,506.2

During the nine months ended September 30, 2014, the Company was in compliance with all the terms and conditions of its debt agreements.

Senior Notes due October 2021

In September 2014, AK Steel issued $430.0 of 7.625% Senior Notes due October 2021 (the “2021 Notes”) at a price of 99.325% of par, generating net proceeds of $418.6 after underwriting discounts and other fees. The Company used the net proceeds from the issuance of the 2021 Notes, plus a portion of the net proceeds from a concurrent public offering of AK Holding common stock, for the purchase price of Dearborn. AK Holding, in addition to AK Tube LLC (“AK Tube”) and AK Steel Properties, Inc. (“AK Properties”), two 100%-owned subsidiaries of AK Steel, each fully and unconditionally, jointly and severally, guarantee the payment of interest, principal and premium, if any, on the 2021 Notes. The 2021 Notes were issued under a supplemental indenture, which includes covenants and restrictions substantially similar to the existing indentures governing the 7.625% Senior Notes due 2020 and the 8.375% Senior Notes due 2022 and are equal in right of payment to those notes. Prior to October 1, 2017, AK Steel may redeem the 2021 Notes at a price equal to par plus a make-whole premium and all accrued and unpaid interest to the date of redemption. Subsequent to that date, they are redeemable at 103.813% until October 1, 2018, 101.906% thereafter until October 1, 2019 and 100.0% thereafter, together with all accrued and unpaid interest to the date of redemption.

Credit Facility

Upon the acquisition of Dearborn on September 16, 2014, the Company amended its Credit Facility that it entered into in March 2014 with a group of lenders. The amendment to the Credit Facility, among other things, increases the aggregate principal amount of commitments under the Credit Facility to $1.5 billion in order to provide additional liquidity, increases availability thresholds, and amends certain covenants to increase the operational and strategic flexibility of AK Steel and its subsidiaries. In addition, the amended Credit Facility requires the maintenance of a minimum fixed charge coverage ratio of one to one if availability under the Credit Facility is less than $150.0. The Credit Facility, which expires in March 2019, replaced AK Steel’s prior $1.1 billion asset-backed revolving credit facility (“Replaced Credit Facility”), and is secured by the same classes of assets as the Replaced Credit Facility. The Credit Facility contains common restrictions similar to the Replaced Credit Facility, including limitations on, among other things, distributions and dividends, acquisitions and investments, indebtedness, liens and affiliate transactions. Availability is calculated as the lesser of the Credit Facility commitment or the Company’s eligible collateral after advance rates, less in either case outstanding revolver borrowings and letters of credit. The Company’s obligations under its Credit Facility are secured by its inventory and accounts receivable, and availability under the Credit Facility fluctuates monthly based on the varying levels of eligible collateral. The Credit Facility provides the Company with enhanced liquidity and greater financial and strategic flexibility. The Credit Facility includes a separate “first-in, last-out”, or “FILO” tranche, which allows the Company to maximize its eligible collateral at higher advance rates. In April 2014, in order to provide additional collateral to the borrowing base and increase the Company’s availability under the Credit Facility, thereby enhancing its liquidity, the Company added AK Tube and AK Properties as guarantors under the Credit Facility. AK Steel’s parent company, AK Holding, also guarantees the Credit Facility. Immediately after the acquisition, Dearborn was merged with and into AK Steel and thus the eligible assets of Dearborn Works are included in the eligible collateral under the Credit Facility.

At September 30, 2014, the Company’s eligible collateral, after application of applicable advance rates, was $1.5 billion. As of September 30, 2014, there were outstanding Credit Facility borrowings of $560.0. Availability as of September 30, 2014 was further reduced by $71.4 of outstanding letters of credit, resulting in remaining availability of $868.6.

Exchangeable Notes

AK Steel has $150.0 of outstanding 5.00% Senior Exchangeable Notes due November 2019 (the “Exchangeable Notes”). Among other things, the indenture governing the Exchangeable Notes provides noteholders with an exchange right at the option of the noteholders, in the event that the closing price of the Company’s common stock is greater than or equal to $7.02 per share (130% of the exchange price of the Exchangeable Notes) for at least 20 trading days during the last 30 consecutive trading days of a calendar quarter. As of October 1, 2014, this exchange right was triggered for the quarter ended September 30, 2014, and will remain available until December 31, 2014. Thereafter, the triggering condition will be reassessed at the beginning of each quarter while any Exchangeable Notes remain outstanding. The Company would be required to pay noteholders cash for the principal amount of the Exchangeable Notes and to pay cash or issue AK Holding common stock (at AK Steel’s option) for the premium if they elect to exchange their Exchangeable Notes during the fourth quarter of 2014. As a result, a portion of the equity component of the Exchangeable Notes, calculated as the difference between the principal amount of the Exchangeable Notes and the carrying amount of the liability component of the Exchangeable Notes, was considered redeemable and classified as temporary equity of $31.0 on the Condensed Consolidated Balance Sheets at September 30, 2014. In the event that holders of Exchangeable Notes elect to exchange, the Company expects to fund any cash settlement from cash or borrowings under its Credit Facility or both. There have been no exchanges as of the date of this filing.