OKLAHOMA CITY, March 5, 2019 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE:CHK) (the "Company") today announced the
commencement of private offers of new 8.00% Senior Notes due 2026
(the "New Notes") to be issued by the Company in exchange for
certain outstanding senior unsecured notes of the Company, upon the
terms and subject to the conditions set forth in the Company's
confidential offering memorandum and related letter of transmittal,
each dated March 5, 2019. The
exchange offers are not subject to a minimum or maximum amount.
The following table sets forth each series of outstanding senior
unsecured notes subject to the exchange offers (the "Existing
Notes") and the applicable consideration offered for such series in
the exchange offers for the Existing Notes (the "Exchange
Offers").
|
|
|
Principal Amount of
New Notes(1)
|
Title of
Series
|
CUSIP
Number/ISIN
|
Aggregate Principal
Amount Outstanding
(in
millions)
|
Early Exchange
Consideration, if Tendered and Not Withdrawn Prior to the Early
Tender Date
|
Late Exchange
Consideration, if Tendered After the Early Tender Date and Prior to
the Expiration Date
|
6.625% senior notes
due 2020
|
165167CF2
|
$437.0
|
$1,040.75
|
$1,010.75
|
6.875% senior notes
due 2020
|
165167BU0
165167BT3
U16450AQ8
|
$227.7
|
$1,051.90
|
$1,021.90
|
6.125% senior notes
due 2021
|
165167CG0
|
$547.5
|
$1,046.80
|
$1,016.80
|
5.375% senior notes
due 2021
|
165167CK1
|
$266.7
|
$1,007.17
|
$977.17
|
|
|
|
|
|
|
(1) For
each $1,000 principal amount of Existing Notes.
|
|
|
|
|
|
|
|
|
|
As of March 5, 2019, Eligible
Holders (as defined below) representing (a) approximately
$162.8 million, or approximately
37.2%, of the aggregate principal amount of the 6.625% Senior
Notes, (b) approximately $96.8
million, or approximately 42.5%, of the aggregate principal
amount of the 6.875% Senior Notes, (c) approximately $254.5
million, or approximately 46.5%, of the aggregate principal amount
of the 6.125% Senior Notes and (d) approximately $126.4 million, or
approximately 47.4%, of the aggregate principal amount of the
5.375% Senior Notes have committed to tender their Existing Notes
in the Exchange Offers.
The Exchange Offers are being made only to Eligible Holders.
Eligible Holders must validly tender (and not withdraw) their
Existing Notes at or prior to 5:00
p.m., New York City time,
on March 18, 2019 (the "Early Tender
Date"), in order to be eligible to receive the applicable "Early
Exchange Consideration" shown in the table above. Existing Notes
tendered after the Early Tender Date but prior to the Expiration
Date (as defined below) will be eligible to receive only the
applicable "Late Exchange Consideration" set out in such table.
The Exchange Offers will expire at 11:59
p.m., New York City time,
on April 1, 2019 (the "Expiration
Date"). The settlement date for the Exchange Offers will occur
promptly after the Expiration Date and is expected to occur on
April 3, 2019 (the "Final Settlement
Date"), subject to all conditions to the Exchange Offers having
been satisfied or waived by the Company. While not expected to do
so, the Company may, in certain circumstances, elect to settle the
Exchange Offers for any or all series of Existing Notes validly
tendered prior to the Early Tender Date (and not validly withdrawn)
at any time after the Early Tender Date and prior to the Expiration
Date (the "Early Settlement Date"), subject to all conditions to
the Exchange Offers having been satisfied or waived by the Company.
Such Early Settlement Date, if any, will be determined at the
Company's option and, if elected, would not be expected to occur
earlier than March 22, 2019.
Eligible Holders 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 accepted in the
Exchange Offers from the applicable latest interest payment date
to, but not including, the applicable settlement date. Interest on
the New Notes will accrue from the date of first issuance of New
Notes.
Tenders may be validly withdrawn at any time on or prior to
5:00 p.m., New York City time, on March 18, 2019, but not thereafter unless
required by law.
The New Notes will be fully and unconditionally guaranteed,
jointly and severally, on a senior unsecured basis, by certain
subsidiaries of the Company. The entities acquired in connection
with the Company's acquisition of WildHorse Resource Development
Corporation on February 1, 2019 do
not guarantee the Company's revolving credit facility or the
Company's outstanding notes and will not guarantee the New
Notes.
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 confidential
offering memorandum and other documents relating to the Exchange
Offers will only be distributed to, holders who complete and return
an eligibility letter 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, who are "non-U.S. qualified offerees" (as defined
in the eligibility letter) (such persons, "Eligible Holders").
Holders who desire to obtain and complete an eligibility letter
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 will enter into a registration rights agreement on
the first issuance date of the New Notes. In that agreement, the
Company will agree for the benefit of the holders of the New Notes
that it will use its commercially reasonable efforts to file with
the Securities and Exchange Commission (the "SEC") and cause to
become effective a registration statement relating to an offer to
exchange the New Notes for an issue of SEC-registered additional
notes with terms substantially identical to the New Notes.
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. 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 Company may, to the extent
permitted by applicable law, and to the extent permitted by certain
restrictive covenants governing the Company's indebtedness, after
the Expiration Date of the Exchange Offers, purchase Existing Notes
in the open market, in privately negotiated transactions, through
subsequent tender or exchange offers or otherwise. 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.
The securities to be offered in the Exchange Offers 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. 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.
Headquartered in Oklahoma
City, Chesapeake Energy Corporation's (NYSE: CHK) operations
are focused on discovering and developing its large and
geographically diverse resource base of unconventional oil and
natural gas assets onshore in the United
States.
This news release includes "forward-looking statements" that
give the Company's current expectations or forecasts of future
events, including the timing of the settlement, the size of the
Exchange Offers and expected participation by certain holders of
Existing Notes. Although we believe the expectations and forecasts
reflected in our forward-looking statements are reasonable, we 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 stated in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2018 and its other
filings with the SEC), and actual results may differ from the
expectation expressed. 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.
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SOURCE Chesapeake Energy Corporation