OKLAHOMA CITY, Dec. 18, 2019 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE: CHK) ("Chesapeake" or the "Company")
today announced the preliminary results of its previously announced
private offers to exchange (each, an "Exchange Offer," and
collectively, the "Exchange Offers") its new 11.5% Senior Secured
Second Lien Notes due 2025 (the "Second Lien Notes") for certain
outstanding senior unsecured notes listed in the table below (the
"Existing Notes") upon the terms and subject to the conditions set
forth in the Company's confidential offering memorandum, dated
December 4, 2019. As of 5:00 p.m., New York
City time, on December 17,
2019 ("the Early Tender Date"), approximately $3.22 billion aggregate principal amount, or
approximately 71.4%, of Existing Notes were validly tendered and
not validly withdrawn in the Exchange Offers.
Chesapeake also announced that (1) the Minimum Second Lien Note
Condition (as defined in the confidential offering memorandum) has
been satisfied, (2) it has increased the maximum aggregate exchange
amount in the Exchange Offers from $1,500,000,000 to $2,210,156,000 (the "New Maximum Exchange
Amount") and (3) it has elected to have an early settlement date of
December 19, 2019 for Existing Notes
validly tendered and not validly withdrawn at or prior to the Early
Tender Date (the "Early Settlement Date"). All other terms and
conditions of the Exchange Offers, as previously announced and
described in the confidential offering memorandum, remain
unchanged.
The following table sets forth the approximate aggregate
principal amount of each series of Existing Notes that were validly
tendered and not validly withdrawn on or prior to the Early Tender
Date, as well as the acceptance priority level (the "Acceptance
Priority Level") for such series, and the applicable consideration
offered for such series in the applicable Exchange Offer and the
aggregate principal amount of each series of Existing Notes to be
accepted on the Early Settlement Date.
Title of Series of
Existing
Notes
|
CUSIP
Number(s)
|
Aggregate
Outstanding
Principal Amount
|
Acceptance
Priority Level(1)
|
Aggregate
Principal
Amount of
Existing Notes
Tendered
|
Principal
Amount to be
Accepted in
Early
Settlement
|
Early Exchange
Consideration,
if Tendered and
Not Withdrawn
at or Prior to
the Early
Tender Date(2)
|
8.00% Senior Notes
due
2027
|
165167CV7
165167CZ8
|
$1,090,000,000
|
1
|
$837,265,000
|
$837,253,000
|
$700.00
|
8.00% Senior Notes
due
2026
|
165167DC8
U16450AY1
|
$918,514,000
|
2
|
$872,653,000
|
$872,653,000
|
$700.00
|
8.00% Senior Notes
due
2025
|
165167CT2
165167CU9
U16450AU9
|
$1,244,498,000
|
3
|
$998,530,000
|
$998,526,000
|
$700.00
|
7.50% Senior Notes
due
2026
|
165167DB0
|
$400,000,000
|
4
|
$281,065,000
|
$281,063,000
|
$620.00
|
7.00% Senior Notes
due
2024
|
165167DA2
|
$850,000,000
|
5
|
$226,407,000
|
$226,405,000
|
$620.00
|
_______________
(1)
|
All Existing Notes
that were tendered for exchange in an Exchange Offer at or prior to
the Early Tender Date will have priority over Existing Notes that
are tendered for exchange after the Early Tender Date, even if such
Existing Notes tendered after the Early Tender Date have a higher
Acceptance Priority Level than Existing Notes tendered at or prior
to the Early Tender Date. The maximum amount of Second Lien Notes
that the Company will issue in the Exchange Offers equals
$2,210,156,000 aggregate principal amount of Second Lien
Notes.
|
(2)
|
For each $1,000
principal amount of Existing Notes.
|
On the Early Settlement Date, the Company expects to issue
approximately $2.21 billion aggregate
principal amount of Second Lien Notes in exchange for the Existing
Notes that were validly tendered and not validly withdrawn prior to
the Early Tender Date, subject to all conditions to the Exchange
Offers having been satisfied or waived by the Company.
Existing Notes validly tendered at or prior to the Early
Settlement Date will be accepted in accordance with the
confidential offering memorandum, including with respect to
authorized minimum denominations of Existing Notes that will be
accepted in the Exchange Offers and the minimum denominations of
Second Lien Notes that will be issued in exchange for such Existing
Notes. Because the aggregate amount of Second Lien Notes to be
issued in exchange for Existing Notes validly tendered at or prior
to the Early Tender Date equals the New Maximum Exchange Amount, no
Existing Notes tendered after the Early Settlement Date will be
accepted.
The Exchange Offers will expire at 11:59
p.m., New York City time,
on January 2, 2020 (the "Expiration
Date").
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 accepted in the Exchange Offers 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.
The Exchange Offers are conditioned on the satisfaction or
waiver of certain customary conditions, as described in the
confidential offering memorandum. 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 in offshore transactions in compliance with
Regulation S, 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 is
making the Exchange Offers only to Eligible Holders through, and
pursuant to, the terms of the confidential offering memorandum and
the 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 the Second Lien
Notes, 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. In addition, this
press release is neither an offer to purchase nor a solicitation of
an offer to sell any Existing Notes in the Exchange Offers.
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"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including the
timing of the settlement, the size of the Exchange Offers and
expected participation by certain holders of Existing Notes.
Forward-looking statements are statements other than statements of
historical fact. They include statements regarding the timing of
the settlement and the size of the exchange offers. Although we
believe the expectations and forecasts reflected in the
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. Factors that could cause actual results to
differ materially from expected results include our ability to
comply with the covenants under our revolving credit facilities and
other indebtedness and the related impact on our ability to
continue as a going concern, the volatility of oil, natural gas and
NGL prices and other factors described under "Risk Factors" in Item
1A of our annual report on Form 10-K and any updates to those
factors set forth in Chesapeake's subsequent quarterly reports on
Form 10-Q or current reports on Form 8-K.
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Brad Sylvester,
CFA
|
Gordon
Pennoyer
|
(405)
935-8870
|
(405)
935-8878
|
ir@chk.com
|
media@chk.com
|
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SOURCE Chesapeake Energy Corp.