Worthington Steel Inc. (NYSE: WS) announced it has priced a $700 million offering of 7.750% senior secured notes due 2033. The offering is expected to close on or about June 1, 2026, subject to customary closing conditions.

The aggregate principal amount of notes decreased to $700 million from an initially planned $900 million. Correspondingly, the principal amount of term loans under Worthington Steel's new term loan credit facility increased from $500 million to $700 million.

The company intends to use net proceeds from the offering, together with borrowings under the new term loan credit facility, to fund its pending acquisition of Kloeckner & Co SE. Additional uses include funding loans to Kloeckner pursuant to a shareholder loan, financing share purchases and other compensation to remaining minority Kloeckner shareholders, paying transaction fees and expenses, repaying existing indebtedness, and general working capital purposes.

The Kloeckner acquisition is expected to be completed on June 3, 2026, within three business days of the offering's closing. Given this timing, Worthington Steel expects to issue the notes directly rather than through its wholly owned subsidiary, WS Escrow LLC, and the net proceeds are not expected to be deposited into escrow.

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

If the Kloeckner acquisition is not completed by March 12, 2027, or upon certain other events, the notes will be subject to mandatory redemption at 100% of the issue price plus accrued interest.

The notes have not been registered under the Securities Act of 1933 and will be offered only to qualified institutional buyers or non-U.S. persons under applicable exemptions.