Cliffs Natural Resources (NYSE: CLF) continues to be in the news. This time, the company announced that it decided to terminate the previously announced debt tender offer. According to the company's press release, none of the securities that have been tendered in the offer will be accepted for purchase. Cliffs' CEO Lourenco Goncalves stated that the company had made the decision to terminate the tender offer because of the unfavorable move in market rates during the past few weeks.

Initially, the debt tender offer was designed to take advantage of Cliffs' depressed bond prices. However, continuous pressure on iron ore prices has taken its toll. Initially, I viewed the debt tender offer as a positive move, and expected that the company could reduce its indebtedness by around $140 million. This number is not significant compared to Cliffs' $3 billion debt, but I think that one should not expect any drastic reduction of debt in the near term. Instead, one could expect opportunistic reduction of debt with the proceeds from asset sales. The example of this strategy is the recent sale of Logan County Coal. The proceeds from this sale, which will total $175 million in cash, will be used for debt reduction. Once again, the proceeds seem insignificant in comparison with Cliffs' debt level, but, in my view, any reduction in Cliffs' debt is…

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