AK Steel Holding Corporation (NYSE:AKS) updated on the pricing of offering of its common stock. The company has agreed to sell 65 million shares of its common stock priced at $4.90 per share. Pertaining to this offering, AK Holding has given the underwriters a 30-day alternative to buy up to an additional 9.75 million shares of common stock.

AK Holding plans to use the proceeds from the common stock sale to repay outstanding borrowings under its revolving credit facility of $1.5 billion and for meeting general corporate purposes. The public offering is projected to close on November 1, contingent to customary closing conditions.

The highlights

AK Steel moves out of the gate after its shares rating was revised recently. BofA Merrill Lynch upgraded the firm’s shares to ‘Buy’ rating from ‘Underperform’ rating. Even the group has increased the price target to $8, which is just double of previous target of $4. This change in investment sentiment can largely be attributed to the remarkable 3Q2016 financial report.

Following the report, even other U.S. steelmaker firms traded higher. Many of the companies in the last quarter have significantly benefited from cost-cutting initiatives.

AKS posted better than projected 3Q2016 financial report as total operating expenses declined 19% YoY. In 3Q2016, the revenues declined YoY to $1.45 billion following the decline of 24% in shipments. This decline again can be attributed to management’s choice to reduce focus on less profitable commoditized offerings. However, the selling price measured per ton basis surged 11% to $1,016, due to favorable selling environment and a better product mix.

BofA’s Timna Tanners is of view that going forward U.S. steel prices could witness a rally. The research highlights the prices of domestic scrap steel might jump $30-$40/ton in November following a stronger demand. Also, it should be followed by the firm’s focus shifting on premium products. Due to this data, the analyst has revised FY2017 EPS projection estimate for the company to $0.90 from previously given target of $0.55. The rating upgrade also came for Steel Dynamics as the research group revised its rating to ‘Buy’ from ‘Neutral’ after recording strong 3Q2016 results in last week.