CMC works with West Virginia government on bond funding

Irving, Texas-based CMC has announced plans to raise funds through a proposed tax-exempt bond financing issuance in West Virginia tied to the recycled-content steel producer’s plans to build a mill in that state.

CMC says the proposed financing could raise $150 million and is being planned in coordination with the West Virginia Economic Development Authority (WVEDA). That agency has authorized the issuance and sale of Solid Waste Disposal Facility Revenue Bonds tied to the mill project, according to CMC.

“If the financing is completed, WVEDA will issue the bonds and loan the proceeds of the sale of the bonds to CMC pursuant to a loan agreement between CMC as borrower and WVEDA as lender,” the steelmaking and metals recycling firm says.

The bond proceeds will be used to finance a portion of the costs of the acquisition, construction, reconstruction and equipping of waste and recycling facilities near the mill in Berkeley County, West Virginia, which is near the state’s border with Maryland, according to CMC.

CMC expects its overall investment in the 500,000-ton-per-year electric arc furnace (EAF) mill to be between $550 million and $600 million, net of $75 million of government assistance expected to be received from the WVEDA. The company also expects to qualify for a net tax credit under the federal Inflation Reduction Act of approximately $80 million.

The bonds, if issued, will be special limited obligations of WVEDA and will not be registered under the Securities Act of 1933 or under any state or other securities laws, according to CMC.

“CMC's obligations under the loan agreement will be senior unsecured obligations,” the company adds.