CHICAGO — Pittsburgh-based U.S. Steel Corp., the largest integrated steel producer in the country, will enter the market Thursday with $94 million of tax-exempt environmental improvement revenue bonds to finance solid-waste projects at facilities in three states.

The company is tapping three conduit issuers to sell the bonds under three separate indentures.

The Indiana Finance Authority will price $29 million, Pennsylvania’s Allegheny County Industrial Development Authority is selling $25 million, and a third series of $40 million will be isued through the Southwestern Illinois Development Authority.

The bonds will be fixed rate and feature 30-year maturities.

Morgan Stanley and Goldman, Sachs & Co. are underwriters.

Kutak Rock LLP is bond counsel for the Pennsylvania and Illinois bonds, and Barnes & Thornburg LLP is bond counsel for the Indiana bonds. Chapman and Cutler LLP is counsel to the Illinois issuer.

Proceeds from the deal will finance renovations and construction of solid-waste disposal facilities at the company’s locations in Gary, Ind., Granite City, Ill., and Braddock, Penn.

The bonds are not rated.

The transaction comes a week after the U.S. Justice Department, on behalf of the Environmental Protection Agency and three states, sued the steel giant for violations of the federal Clean Air Act.

Illinois Attorney General Lisa Madigan and attorneys generals in Indiana and Michigan filed the lawsuit in U.S. District Court in Hammond, Ind.

The lawsuit accuses U.S. Steel of thousands of clean-air violations from 2008 to 2011 at its Gary and Granite City plants and one in Ecorse, Mich.

The violations carry fines that range from $25,000 to $37,500 a day, and the government is asking the company to renovate its facilities with up-to-date technology.

A spokesman for the company said it would “vigorously defend this action and its substantial financial investment in environmental controls and its commitment to protecting the environment in Indiana and elsewhere,” according to a local Indiana report.

U.S. Steel’s operating income dropped to $180 million for the first six months of 2012 compared to $209 million for the same period in 2011, according to bond documents.

Its stock is down 20% so far this year and down 45% from last year.

A block of tax-free environmental improvement revenue bonds issued last year through the Indiana Finance Authority with  a 6% coupon and 2019 maturity was yielding 5.24% in recent trading, according to the Municipal Securities Rulemaking Board’s EMMA website.

Debt issued through a Pennsylvania authority in 2011 with a 6.5% coupon and 2027 maturity was yielding 6.27% in most recent trading.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.