Worthington Steel Inc. (NYSE: WS) announced that its wholly owned subsidiary WS Escrow LLC plans to offer $900 million in senior secured notes due 2033, subject to market conditions.

The company intends to use proceeds from the offering, along with borrowings from a new term loan credit facility, to fund its pending acquisition of Kloeckner & Co SE. Additional uses include funding shareholder loans to Kloeckner, compensating minority shareholders, paying transaction expenses, repaying existing debt, and supporting general working capital needs.

The offering structure depends on the acquisition timeline. If the Kloeckner acquisition is not expected to close within three business days of the notes offering, proceeds will be deposited into an escrow account until certain conditions are met. If the acquisition is expected to close within that timeframe, Worthington Steel may issue the notes directly without escrow.

The notes include a special mandatory redemption provision if the acquisition is not completed by March 12, 2027, or upon certain other events. In such cases, notes would be redeemed at 100% of issue price plus accrued interest.

Following the escrow release, the notes will be guaranteed by Worthington Steel's subsidiaries that guarantee obligations under the new term loan facility. The notes and guarantees will be secured by liens on substantially all assets of Worthington Steel and the guarantors, subject to certain exceptions.

The notes will be offered only to qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S, as they will not be registered under the Securities Act of 1933.

The information is based on a company press release statement.