OKLAHOMA CITY, Sept. 27, 2017 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE: CHK) announced today that it has
commenced cash tender offers (collectively, the "Tender Offers,"
and each offer to purchase a series of notes individually, a
"Tender Offer") to purchase up to $550,000,000 aggregate purchase price, exclusive
of accrued interest (the "Aggregate Maximum Purchase Amount"), of
the outstanding notes of Chesapeake set forth in the table below
(collectively, the "Notes").
No more than $350,000,000
aggregate purchase price, exclusive of accrued interest (the
"Priority 1 Tender Cap"), of 8.00% Senior Secured Second Lien Notes
due 2022 (the "Priority 1 Notes"), no more than $200,000,000 aggregate purchase price, exclusive
of accrued interest (the "Priority 2 Tender Cap"), of 6.625% Senior
Notes due 2020 and 6.875% Senior Notes due 2020 (the "Priority 2
Notes"), and no more than $200,000,000 less the aggregate purchase price,
exclusive of accrued interest, of the Priority 2 Notes validly
tendered and accepted for purchase (the "Priority 3 Tender Cap"
and, together with the Priority 1 Tender Cap and Priority 2 Tender
Cap, the "Tender Caps" and each individually, a "Tender Cap"), of
6.125% Senior Notes due 2021 and 5.375% Senior Notes due 2021 (the
"Priority 3 Notes"), will be purchased in the Tender Offers. The
terms and conditions of the Tender Offers are described in an Offer
to Purchase dated September 27, 2017
(the "Offer to Purchase") and the related Letter of
Transmittal.
The following table sets forth certain terms of the Tender
Offers:
Series of
Notes
|
|
CUSIP
Number
|
|
Aggregate
Principal Amount
Outstanding
|
|
Tender
Caps(1)
|
|
Acceptance
Priority
Level
|
|
Tender Offer
Consideration(2)
|
|
Early Tender
Premium(2)
|
|
Total
Consideration(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.00% Senior Secured
Second Lien Notes due 2022
|
|
165167CQ8
U16450AT2
|
|
$1,737,135,000
|
|
$350,000,000
|
|
1
|
|
$1,062.50
|
|
$30.00
|
|
$1,092.50
|
6.625% Senior Notes
due 2020
|
|
165167CF2
|
|
$572,621,000
|
|
$200,000,000
|
|
2
|
|
$1,010.00
|
|
$30.00
|
|
$1,040.00
|
6.875% Senior Notes
due 2020
|
|
165167BU0
165167BT3
USU16450AQ87
|
|
$278,978,000
|
|
|
2
|
|
$1,005.00
|
|
$30.00
|
|
$1,035.00
|
6.125% Senior Notes
due 2021
|
|
165167CG0
|
|
$550,327,000
|
|
|
3
|
|
$982.50
|
|
$30.00
|
|
$1,012.50
|
5.375% Senior Notes
due 2021
|
|
165167CK1
|
|
$269,907,000
|
|
|
3
|
|
$937.50
|
|
$30.00
|
|
$967.50
|
(1)
A $350,000,000 Tender Cap applies to
the aggregate purchase (exclusive of Accrued Interest) of the 8.00%
Senior Secured Second Lien Notes due 2022. A $200,000,000 Tender Cap applies to the aggregate
purchase price (exclusive of Accrued Interest) of the 6.625% Senior
Notes due 2020 and the 6.875% Senior Notes due 2020, collectively.
A Tender Cap equal to $200,000,000
less the aggregate purchase price (exclusive of Accrued Interest)
of the 6.625% Senior Notes due 2020 and the 6.875% Senior Notes due
2020, collectively, validly tendered and accepted for purchase,
applies to the 6.125% Senior Notes due 2021 and the 5.375% Senior
Notes due 2021, collectively.
(2)
Per $1,000 principal amount of Notes
validly tendered and accepted for purchase in the applicable Tender
Offer (exclusive of any Accrued Interest, which will be paid in
addition to the Tender Offer Consideration or the Total
Consideration, as applicable, to, but not including, the applicable
Settlement Date).
(3)
Includes the applicable Early Tender Premium, (as defined
below).
The Tender Offers will expire at 11:59
p.m., New York City time,
on October 25, 2017 (such date and
time with respect to a Tender Offer, as it may be extended for such
Tender Offer, the "Expiration Date"). No tenders will be
valid if submitted after the Expiration Date. Tendered Notes
may be withdrawn from the Tender Offers at or prior to, but not
after, 5:00 p.m., New York City time, on October 11, 2017 (such date and time with respect
to a Tender Offer, as it may be extended for such Tender Offer, the
"Withdrawal Deadline"). Holders of Notes who tender their
Notes after the Withdrawal Deadline, but prior to the Expiration
Date, may not withdraw their tendered Notes, except for certain
limited circumstances where additional withdrawal rights are
required by law.
Subject to the terms and conditions of the Tender Offers, the
consideration for each $1,000
principal amount of Notes validly tendered (and not validly
withdrawn) and accepted for purchase pursuant to the Tender Offers
will be the tender offer consideration for the applicable series of
Notes set forth in the table above (with respect to each series of
Notes, the "Tender Offer Consideration"). Holders of Notes
that are validly tendered (and not validly withdrawn) at or prior
to 5:00 p.m., New York City time, on October 11, 2017 (such date and time with respect
to a Tender Offer, as it may be extended for such Tender Offer, the
"Early Tender Date") and accepted for purchase pursuant to the
Tender Offers will receive the applicable Tender Offer
Consideration plus the early tender premium, for the applicable
series of Notes set forth in the table above (with respect to each
series of Notes, the "Early Tender Premium" and, together with the
applicable Tender Offer Consideration, the "Total
Consideration"). Holders of Notes validly tendered after the
Early Tender Date, but at or prior to the Expiration Date, and
accepted for purchase pursuant to the Tender Offers will receive
the applicable Tender Offer Consideration, but not the Early Tender
Premium for the applicable series of Notes. No tenders will
be valid if submitted after the Expiration Date.
In addition to the Tender Offer Consideration or the Total
Consideration, as applicable, all Holders of Notes accepted for
purchase pursuant to the Tender Offers will, on the Early
Settlement Date (as defined below) or the Final Settlement Date (as
defined below), as applicable, also receive accrued and unpaid
interest on those Notes from the last interest payment date with
respect to those Notes to, but not including, the Early Settlement
Date or the Final Settlement Date, as applicable (the "Accrued
Interest").
Chesapeake reserves the right, in its sole discretion, to
increase or decrease the Aggregate Maximum Purchase Amount and any
Tender Cap at any time without extending the Early Tender Date or
the Withdrawal Deadline or otherwise reinstating withdrawal rights
for any Tender Offer, subject to compliance with applicable law,
which could result in Chesapeake purchasing a greater or lesser
amount of Notes in the Tender Offers. If Chesapeake changes the
Aggregate Maximum Purchase Amount or any Tender Cap, it does not
expect to extend the Withdrawal Deadline, subject to applicable
law. At the current Aggregate Maximum Purchase Amount and Tender
Caps, the amount of Priority 1 Notes accepted for purchase would
not reduce the amount of Priority 2 Notes and Priority 3 Notes,
collectively, accepted for purchase. At the current Tender
Caps, the Aggregate Maximum Purchase Amount would not affect the
amount of Priority 1 Notes, Priority 2 Notes or Priority 3 Notes
accepted for purchase.
Chesapeake reserves the right, in its sole discretion, at any
point following the Early Tender Date and prior to the Expiration
Date, to accept for purchase any Notes validly tendered at or prior
to the Early Tender Date (the date of such acceptance and
purchase, the "Early Settlement Date"), subject to the Aggregate
Maximum Purchase Amount, the Tender Caps, the Acceptance Priority
Levels and proration as described in the Offer to Purchase.
The Early Settlement Date will be determined at Chesapeake's
option, assuming the conditions to the Tender Offers have been
either satisfied or waived by Chesapeake at or prior to the Early
Settlement Date. If Chesapeake elects to have an Early Settlement
Date, it will accept Notes validly tendered at or prior to the
Early Tender Date, subject to the Aggregate Maximum Purchase
Amount, the Tender Caps, the Acceptance Priority Levels and
proration as described in the Offer to Purchase. Irrespective
of whether Chesapeake chooses to exercise its option to have an
Early Settlement Date, it will purchase any remaining Notes that
have been validly tendered at or prior to the Expiration Date and
accepted for purchase, subject to all conditions to the Tender
Offers having been either satisfied or waived by Chesapeake,
promptly following the Expiration Date (the date of such acceptance
and purchase, the "Final Settlement Date"; the Final Settlement
Date and the Early Settlement Date each being a "Settlement Date"),
subject to the Aggregate Maximum Purchase Amount, the Tender Caps,
the Acceptance Priority Levels and proration as described in the
Offer to Purchase. The Final Settlement Date is expected to occur
on the second business day following the Expiration Date, assuming
the conditions to the Tender Offers have been either satisfied or
waived by Chesapeake at or prior to the Expiration Date and Notes
having an aggregate purchase price (exclusive of Accrued Interest)
equal to the Aggregate Maximum Purchase Amount are not purchased on
the Early Settlement Date.
Subject to the Aggregate Maximum Purchase Amount, the Tender
Caps and proration as described in the Offer to Purchase, all Notes
validly tendered at or prior to the Early Tender Date having a
higher Acceptance Priority Level will be accepted for purchase
before any Notes validly tendered at or prior to the Early Tender
Date having a lower Acceptance Priority Level are accepted for
purchase, and all Notes validly tendered after the Early Tender
Date having a higher Acceptance Priority Level will be accepted for
purchase before any Notes validly tendered after the Early Tender
Date having a lower Acceptance Priority Level are accepted for
purchase. However, even if the Tender Offers are not fully
subscribed as of the Early Tender Date, subject to the Aggregate
Maximum Purchase Amount and the Tender Caps, Notes validly tendered
at or prior to the Early Tender Date will be accepted for purchase
before any Notes validly tendered after the Early Tender Date are
accepted for purchase, even if such Notes validly tendered after
the Early Tender Date have a higher Acceptance Priority Level than
Notes validly tendered at or prior to the Early Tender Date.
Therefore, if the aggregate purchase price (exclusive of Accrued
Interest) of Notes validly tendered at or prior to the Early Tender
Date up to the amount of the applicable Tender Cap equals or
exceeds the Aggregate Maximum Purchase Amount, Chesapeake will not
accept for purchase any Notes tendered after the Early Tender Date,
and if the aggregate purchase price (exclusive of Accrued Interest)
of Priority 1 Notes, Priority 2 Notes or Priority 3 Notes validly
tendered at or prior to the Early Tender Date equals or exceeds the
Priority 1 Tender Cap, Priority 2 Tender Cap or the Priority 3
Tender Cap, as applicable, Chesapeake will not accept for purchase
Priority 1 Notes, Priority 2 Notes or Priority 3 Notes, as
applicable, tendered after the Early Tender Date. Additional
information about the application of the Aggregate Maximum Purchase
Amount, Acceptance Priority Levels, Tender Caps and proration is
set forth in the Offer to Purchase.
The Tender Offers are not conditioned upon a minimum amount of
Notes of any series, or a minimum amount of Notes of all series,
being tendered. However, the Tender Offers are subject to, and
conditioned upon, the satisfaction or waiver of certain conditions
described in the Offer to Purchase, including receipt by Chesapeake
of net proceeds from a concurrent private offering of senior notes
to finance at least $500,000,000 of
the payment of the Tender Offer Consideration and the Total
Consideration.
Morgan Stanley & Co. LLC is acting as the dealer manager in
the Tender Offers. Global Bondholder Services Corporation has been
retained to serve as both the depositary and the information agent
for the Tender Offers. Persons with questions regarding the Tender
Offers should contact Morgan Stanley & Co. LLC at (toll-free)
(800) 624-1808 or (collect) (212) 761-1057. Requests for
copies of the Offer to Purchase, the related Letter of Transmittal
and other related materials should be directed to Global Bondholder
Services Corporation at (toll-free) (866) 470-4200 or (collect)
(212) 430-3774.
None of Chesapeake, its board of directors, its officers, the
dealer manager, the depositary, the information agent or the
trustees with respect to the Notes, or any of their respective
affiliates, makes any recommendation that holders tender or refrain
from tendering all or any portion of the principal amount of their
Notes, and no one has been authorized by any of them to make such a
recommendation. Holders must make their own decision as to whether
to tender their Notes and, if so, the principal amount of Notes to
tender. The Tender Offers are made only by the Offer to
Purchase and related Letter of Transmittal. This press
release is neither an offer to purchase nor a solicitation of an
offer to sell any notes in the Tender Offers. The Tender
Offers are not being made to holders of 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. In any jurisdiction in which the Tender Offers are
required to be made by a licensed broker or dealer, the Tender
Offers will be deemed to be made on behalf of Chesapeake by the
dealer manager or one or more registered brokers or dealers that
are licensed under the laws of such jurisdiction.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of
securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of securities will be
made only by means of a private offering circular pursuant to Rule
144A and Regulation S under the Securities Act of 1933, as
amended.
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. Chesapeake also owns oil and natural gas marketing
and natural gas 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 amounts to be
purchased in the Tender Offers and the results of the proposed
notes offering. 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 Tender Offers, including the
ability to consummate the proposed notes offering, the ability to
consummate any or all of the Tender Offers and those stated in
Chesapeake's Annual Report on Form 10-K for the year ended
December 31, 2016 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.
INVESTOR CONTACT:
Brad Sylvester, CFA
(405) 935-8870
ir@chk.com
MEDIA CONTACT:
Gordon Pennoyer
(405) 935-8878
media@chk.com
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SOURCE Chesapeake Energy Corporation