Sector Snap: Steel Makers Fall

HARTFORD, Conn. (AP) — Shares of several steel makers tumbled Wednesday, a day after Steel Dynamics Inc. reduced its dividend by 25 percent and announced it will sell 27 million shares.

Steel Dynamics cut its quarterly dividend to 7.5 cents from 10 cents, payable July 10 to shareholders of record as of June 30.

The Fort Wayne, Ind.-based company also said Tuesday it will offer a $150 million aggregate principal amount of convertible senior notes due 2014.

Citi Investment Research analyst Brian Yu said in a note to investors that the transaction is a "net positive" for the company because its debt has "been an ongoing overhang."

The estimated proceeds of $533 million from the stock and debt offerings will be used to repay a term loan balance of $488 million as of the first quarter of 2009, he said.

Shares of Steel Dynamics fell $1.88, or 12 percent, to $13.71 in afternoon trading Wednesday as the broader market slid.

Meanwhile, United States Steel Corp. fell $2.97, or 8 percent, to $33.46 and AK Steel Holding Corp. dropped $1.44, or nearly 9 percent, to $14.70. Worthington Industries Inc. slipped 85 cents, or 5.5 percent, to $14.64 and Olympic Steel Inc. dropped $2.04, or 10 percent, to $18.20.