OKLAHOMA CITY, Dec. 16, 2015 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE:CHK) today announced the preliminary
results of its private offers to exchange (the "Exchange Offers")
new 8.00% Senior Secured Second Lien Notes due 2022 (the "Second
Lien Notes") for certain outstanding senior unsecured notes listed
in the table below (the "Existing Notes"). As of 5:00 p.m., New York
City time, on December 15,
2015 (the "Original Early Tender Date"), approximately
$2.8 billion aggregate principal
amount of Existing Notes were tendered and not validly withdrawn.
The following table sets forth the approximate aggregate
principal amounts of each series of Existing Notes that were
validly tendered and not validly withdrawn on or prior to the
Original Early Tender Date.
Title of
Series
|
Aggregate Principal
Amount Outstanding Prior to Exchange Offers
(in
millions)
|
Acceptance
Priority
Level(1)
|
Approximate Aggregate
Principal Amount of Existing Notes
Tendered(2) (in
millions)
|
Early Tender Exchange
Consideration(3)
|
6.25%
euro-denominated senior notes
due 2017
|
$378.1(4)
|
1
|
$39.7(4)
|
$1,000.00
|
6.5% senior
notes
due 2017
|
$660.4
|
2
|
$187.7
|
$970.00
|
7.25% senior
notes
due 2018
|
$668.6
|
3
|
$124.1
|
$825.00
|
Floating rate senior
notes due 2019
|
$1,500.0
|
4
|
$368.6
|
$600.00
|
6.625% senior
notes
due 2020
|
$1,300.0
|
5
|
$233.5
|
$610.00
|
6.875% senior
notes
due 2020
|
$500.0
|
5
|
$161.0
|
$608.75
|
6.125% senior
notes
due 2021
|
$1,000.0
|
6
|
$311.9
|
$577.50
|
5.375% senior
notes
due 2021
|
$700.0
|
6
|
$264.9
|
$570.00
|
4.875% senior
notes
due 2022
|
$1,500.0
|
6
|
$662.2
|
$565.00
|
5.75% senior
notes
due 2023
|
$1,100.0
|
6
|
$435.7
|
$567.50
|
|
|
|
|
|
(1) All Existing
Notes that are tendered for exchange in an Exchange Offer on or
before the New Early Tender Date (as defined below) will have
priority over Existing Notes that are tendered for exchange after
the New Early Tender Date, even if such Existing Notes tendered
after the New Early Tender Date have a higher Acceptance Priority
Level than Existing Notes tendered on or before the New Early
Tender Date and even if we do not elect to have an early settlement
date.
(2) Notes
tendered have not been accepted. As stated below, the Company
may elect, in its sole discretion, to settle the Exchange Offers
for any or all Existing Notes validly tendered prior to the New
Early Tender Date (and not validly withdrawn before the Original
Early Tender Date) at any time after the New Early Tender Date and
before the Expiration Date (as defined below).
(3) Principal amount
of Second Lien Notes issuable for each $1,000 principal amount of
Existing Notes.
(4) Based on the
exchange ratio of $1.0986 to €1.00 as of 5:00 p.m., New York City
time, on December 11, 2015, as set forth by the Bloomberg EURUSD
Spot Exchange Rate.
|
The Company also announced today that it has increased the
maximum aggregate principal amount of the Second Lien Notes
issuable in the Exchange Offers from $1.5
billion to $3.0 billion (the
"New Maximum Exchange Amount"). As a result of this increase, the
Company has extended the early tender deadline with respect to the
Exchange Offers to 5:00 p.m.,
New York City time, on
December 18, 2015 (the "New Early
Tender Date"). All withdrawal rights with respect to the Exchange
Offers have expired. Other than the New Maximum Exchange Amount and
the New Early Tender Date, the terms of Exchange Offers remain
unchanged.
The Exchange Offers will expire at 11:59
p.m., New York City time,
on December 30, 2015 (the "Expiration
Date"). The settlement date will occur promptly after the
Expiration Date, subject to all conditions to the Exchange Offers
having been satisfied or waived by the Company. The Company may
elect, in its sole discretion, to settle the Exchange Offers for
any or all Existing Notes validly tendered prior to the New Early
Tender Date (and not validly withdrawn before the Original Early
Tender Date) at any time after the New Early Tender Date and prior
to the Expiration Date, subject to all conditions to the Exchange
Offers having been satisfied or waived by the Company.
Eligible Holders (as defined below) of Existing Notes accepted
for exchange in the Exchange Offers will also receive a cash
payment equal to the accrued and unpaid interest on such Existing
Notes from the applicable latest interest payment date to, but not
including, the applicable settlement date. Interest on the Second
Lien Notes will accrue from the date of first issuance of Second
Lien Notes.
As previously announced, in the event that the Exchange Offers
are oversubscribed, the principal amounts of each series of
Existing Notes that are accepted will be determined in accordance
with the acceptance priority levels of such series. Notwithstanding
the foregoing, all Existing Notes that were tendered on or before
the New Early Tender Date will have priority over Existing Notes
that are tendered for exchange after the New Early Tender Date,
even if such Existing Notes tendered after the New Early Tender
Date have a higher acceptance priority level than Existing Notes
tendered on or before the New Early Tender Date and even if the
Company does not elect to have an early settlement date.
To facilitate the increase to the New Maximum Exchange Amount,
the Company has amended its senior revolving credit facility
maturing in 2019 with its bank syndicate group. The amendment,
among other things, permits the Company to incur up to $4.0 billion of debt secured by junior liens on
the collateral securing the obligations under the revolving credit
facility, with the possibility to exceed $4.0 billion if (i) after giving effect to all
debt secured by such junior liens and the uses of such debt in
retirement of other indebtedness, the net annual cash interest
expense of the Company would increase by no more than $75.0 million, and (ii) the Company has exchanged
debt secured by such junior liens for more than $2.0 billion aggregate principal amount of
outstanding senior notes with maturities or initial put dates in
2017 through 2019.
The Exchange Offers are conditioned on the satisfaction or
waiver of certain customary conditions, as described in the
confidential offering memorandum. The Exchange Offers are not
conditioned upon any minimum amount of Existing Notes being
tendered. The Company may terminate, withdraw, amend or extend any
of the Exchange Offers.
The Exchange Offers will only be made, and the offering
memorandum and other documents relating to the Exchange Offers will
only be distributed to, holders who complete and return an
eligibility form confirming that they are (i) "qualified
institutional buyers" as defined in Rule 144A under the Securities
Act of 1933, as amended ("Securities Act"), or (ii) outside
the United States and persons
other than "U.S. persons" as defined in Rule 902 under the
Securities Act (such persons, "Eligible Holders"). Holders who
desire to obtain and complete an eligibility form should either
visit the website for this purpose at
http://www.gbsc-usa.com/eligibility/Chesapeake or call Global
Bondholder Services Corporation, the Information Agent and
Depositary for the Exchange Offers at (866) 470-4300 (toll-free) or
(212) 430-3774 (collect for banks and brokers).
The Company is making the Exchange Offers only to Eligible
Holders through, and pursuant to, the terms of the confidential
offering memorandum and related letter of transmittal, as amended
by the New Maximum Exchange Amount and the New Early Tender Date.
The Company and its affiliates do not make any recommendation as to
whether Eligible Holders should tender or refrain from tendering
their Existing Notes. Eligible Holders must make their own decision
as to whether to tender Existing Notes and, if so, the principal
amount of the Existing Notes to tender. The Exchange Offers are not
being made to holders of Existing Notes in any jurisdiction in
which the making or acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such
jurisdiction.
This press release is for informational purposes only. This
press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities, in any jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
The securities to be offered have not been registered under the
Securities Act or any state securities laws; and unless so
registered, the securities may not be offered or sold in
the United States or to U.S.
persons except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and applicable state securities laws.
About Chesapeake Energy Corporation
Chesapeake Energy Corporation (NYSE:CHK) is the
second-largest producer of natural gas and the 12th largest
producer of oil and natural gas liquids in the U.S. Headquartered
in Oklahoma City, the company's
operations are focused on discovering and developing its large and
geographically diverse resource base of unconventional natural gas
and oil assets onshore in the U.S. The company also owns marketing
and compression businesses.
This news release includes "forward-looking statements" that
give Chesapeake's current expectations or forecasts of future
events, including the timing of the settlement and the size of the
Exchange Offers. Although we believe the expectations and
forecasts reflected in our forward-looking statements are
reasonable, Chesapeake can give no assurance they will prove to
have been correct. They can be affected by inaccurate or changed
assumptions or by known or unknown risks and uncertainties,
including the satisfaction of conditions precedent to completing
the Exchange Offers, the ability to consummate any or all of the
Exchange Offers and those described under "Risk Factors" in Item 1A
of our annual report on Form 10-K and in our current report on Form
8-K filed on December 2, 2015
(available at http://www.chk.com/investors/sec-filings). We
caution you not to place undue reliance on our forward-looking
statements, which speak only as of the date of this news release,
and we undertake no obligation to update this information, except
as required by applicable law.
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Brad Sylvester, CFA
(405) 935-8870
ir@chk.com
|
Gordon Pennoyer
(405) 935-8878
media@chk.com
|
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SOURCE Chesapeake Energy Corporation