Long-term Debt and Other Financing

9 Months Ended

Sep. 30, 2012

At September 30, 2012 and December 31, 2011, the Company’s debt balances, including current portions, were as follows:



	September 30, 2012			December 31, 2011
Credit Facility	$	442.0		$	250.0
7.625% Senior Notes due May 2020	550.0			550.0
8.375% Senior Notes due April 2022	300.0			—
Industrial Revenue Bonds due 2012 through 2028	101.0			101.5
Unamortized debt discount	(0.8		)	(0.8		)
Total debt	1,392.2			900.7
Less:
Borrowings under Credit Facility classified as short-term	42.0			250.0
Current portion of long-term debt	0.7			0.7
Total long-term debt	$	1,349.5		$	650.0

During the period, the Company was in compliance with all the terms and conditions of its debt agreements.

Credit Facility

AK Steel has a $1.1 billion asset-backed revolving credit facility (“Credit Facility”) with a group of lenders that expires in April 2016. Availability under the Credit Facility fluctuates monthly based on the varying levels of eligible collateral. At September 30, 2012, the Company’s eligible collateral, after application of applicable advance rates, was $1,081.0. As of September 30, 2012 and December 31, 2011, there were outstanding Credit Facility borrowings of $442.0 and $250.0, respectively. Availability as of September 30, 2012 was further reduced by $81.2 attributable to outstanding letters of credit, resulting in remaining availability of $557.8. As of September 30, 2012, there was $400.0 of Credit Facility borrowings classified as long-term based on the Company’s intent and ability to refinance the borrowings on a long-term basis by the continued use of the Credit Facility or by future capital markets transactions.

IRB Refinancing

In February 2012, AK Steel refinanced (the “IRB Refinancing”) $73.3 aggregate principal amount of variable-rate tax-exempt industrial revenue bonds (“IRBs”). The IRB Refinancing was accomplished through offerings of newly-issued fixed-rate tax-exempt IRBs in the same respective aggregate principal amounts as the prior IRBs that they replaced. The net proceeds of the new IRBs were used to redeem and extinguish the prior IRBs in March 2012. The weighted-average fixed interest rate of the new IRBs is 6.8%. AK Holding, of which AK Steel is a wholly-owned subsidiary, fully and unconditionally, jointly and severally, guarantees the payment of interest, principal and premium, if any, on the new IRBs. The prior IRBs were backed by letters of credit, which had the effect of lowering availability under the Credit Facility and, accordingly, the Company’s liquidity. The new IRBs are not backed by letters of credit, but rather are unsecured senior debt obligations of AK Steel. Thus, the Company’s available credit under the Credit Facility increased as a result of the IRB Refinancing.

Senior Notes due 2022

In March 2012, AK Steel issued $300.0 of 8.375% Senior Notes due 2022 (the “2022 Notes”). The issuance generated net proceeds of $293.4 after underwriting discounts and commissions and other fees. The Company used the proceeds from the 2022 Notes to repay outstanding borrowings under the Credit Facility. AK Holding fully and unconditionally, jointly and severally, guarantees the payment of interest, principal and premium, if any, on the 2022 Notes. The 2022 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 (the “2020 Notes”) and are equal in right of payment to the 2020 Notes.

At any time prior to April 1, 2017, AK Steel may redeem the 2022 Notes, in whole or in part, at a redemption price equal to par, plus accrued and unpaid interest and a “make-whole” premium calculated in accordance with the indentures governing the 2022 Notes. In addition, AK Steel may redeem the 2022 Notes, in whole or in part, at any time on or after April 1, 2017, at the redemption price for such notes, set forth below as a percentage of the face amount, plus accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period commencing on April 1 of the years indicated below:



Year	Redemption Price
2017	104.188	%
2018	102.792	%
2019	101.396	%
2020 or thereafter	100.000	%

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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