DOW JONES NEWSWIRES
Chesapeake Energy Corp. (CHK) plans a public offering of an
additional $300 million of its existing 9.50% senior notes due
2015. Last week, the natural-gas producer sold $1 billion of the
same notes.
In December, Chesapeake said it would raise $4 billion in cash
over the next two years through the sale of assets and make deeper
budget cuts to combat a turbulent economy and falling commodity
prices. In recent months, the company has sold assets in natural
gas-rich formations known as shales to generate cash.
The moves are the latest attempt by the biggest producer of U.S.
natural gas to shore up its finances in response to what Chairman
and Chief Executive Aubrey McClendon called a "brutal year for
industry investors." The company's stock has plummeted from a peak
of $74 last summer to $18.01, up 0.1%, after hours Tuesday.
Chesapeake will use the proceeds from the notes offering to
repay outstanding debt under its revolving bank credit facility,
which it anticipates occasionally reborrowing to fund drilling and
leasehold acquisition initiatives and for general corporate
purposes.
The senior notes will be issued as additional securities under
an indenture, which covered Chesapeake's issuance of $1 billion of
9.50% senior notes due 2015 on Feb. 2. The notes in both offerings
will be treated as a single class and will be listed on the New
York Stock Exchange.
Banc of America Securities LLC and Deutsche Bank Securities are
joint book-running managers for the senior notes offering.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com
(Jason Womack contributed to this report.)