Worthington Steel, Inc. 8-K

What Happened
Worthington Steel, Inc. announced on June 1, 2026 that it issued $700,000,000 of 7.750% Senior Secured Notes due June 1, 2033 and entered into a $700,000,000 seven‑year senior secured Term Loan Facility. The company said net proceeds, together with term loan borrowings and cash on hand, will be used to fund the consideration for the proposed Klöckner acquisition, repay certain existing indebtedness of Worthington and Klöckner, pay transaction fees and expenses, and for general working capital. The notes are issued under an indenture with Deutsche Bank Trust Company Americas as trustee and are secured by liens on substantially all assets of the issuer and guarantors; the term loan is administered by Wells Fargo, N.A.

Key Details

• Issuance: $700,000,000 aggregate principal amount of 7.750% Senior Secured Notes, issued June 1, 2026; interest paid semiannually (first payment Dec 1, 2026); maturity June 1, 2033. Notes are not registered under the Securities Act.
• Guarantees & security: Notes jointly and severally guaranteed by present and future restricted subsidiaries that are obligors under the Term Loan; secured by liens on substantially all assets, pari passu with other parity liens.
• Redemption / protections: Company may redeem notes with make-whole or at specified premiums before June 1, 2029; special mandatory redemption at 100% of issue price (plus accrued interest) if the Klöckner acquisition is not consummated by March 12, 2027 (with limited exceptions). Change‑of‑control repurchase at 101% of principal plus accrued interest.
• Term Loan: $700,000,000 seven‑year Term Loan B facility (closed June 1, 2026) with interest at either a base rate + 3.00% or 1/3/6‑month SOFR + 4.00% (floors apply); customary covenants and events of default; no financial maintenance covenant. Revolving credit agreement amended to align collateral with Term Loan liens.

Why It Matters
These financings provide the capital package intended to complete the Klöckner acquisition and refinance related debt, but they also materially increase Worthington Steel’s secured indebtedness and interest expense. The notes carry a fixed 7.75% coupon and rank senior secured, meaning lenders have liens on substantially all assets. Investors should note the special mandatory redemption condition tied to closing the Klöckner deal (March 12, 2027 deadline), the additional leverage and covenant framework, and that the Term Loan contains no financial covenant but does include customary restrictions that could affect capital actions.