OKLAHOMA CITY, Sept. 27, 2017 /PRNewswire/ -- Chesapeake Energy
Corporation (NYSE:CHK) today announced that it has priced its
private placement to eligible purchasers of $300,000,000 aggregate principal amount of
additional 8.00% senior notes due 2025 (the "new 2025 notes") at
101.25% of par, plus accrued interest from July 15, 2017 and $550,000,000 aggregate principal amount of
additional 8.00% senior notes due 2027 (the "new 2027 notes,"
collectively with the new 2025 notes, the "notes") at 99.75% of
par, plus accrued interest from June 6,
2017. The private placement was upsized from a previously
announced amount of $750,000,000.
The new 2025 notes will be an additional issuance of
Chesapeake's outstanding 8.00% senior notes due 2025, which
Chesapeake issued in December 2016 in
an original aggregate principal amount of $1,000,000,000. The new 2025 notes to be issued
in this offering and the previously issued senior notes due 2025
will be treated as a single class of notes under the indenture. The
new 2027 notes will be an additional issuance of Chesapeake's
outstanding 8.00% senior notes due 2027, which Chesapeake issued in
June 2017 in an original aggregate
principal amount of $750,000,000. The
new 2027 notes to be issued in this offering and the previously
issued senior notes due 2027 will be treated as a single class of
notes under the indenture.
The new 2025 notes will mature on January
15, 2025 and bear interest at the annual rate of 8.00%. The
new 2027 notes will mature on June 15,
2027 and bear interest at the annual rate of 8.00%. Interest
on the new 2025 notes will accrue from July
15, 2017 and will be payable semi-annually in arrears on
January 15 and July 15 of each year, beginning on January 15, 2018. Interest on the new 2027 notes
will accrue from June 6, 2017 and
will be payable semi-annually in arrears on December 15 and June
15 of each year, beginning on December 15, 2017.
Chesapeake may redeem some or all of the notes at any time prior
to January 15, 2020, with respect to
the new 2025 notes, and June 15,
2022, with respect to the new 2027 notes, at a price equal
to 100% of the principal amount of the notes to be redeemed plus a
"make-whole" premium. In addition, Chesapeake may redeem some or
all of the notes at any time on or after January 15, 2020, with respect to the new 2025
notes, and June 15, 2022, with
respect to the new 2027 notes, at the applicable redemption price
in accordance with the terms of the notes and the applicable
indentures and supplemental indentures governing the notes. In
addition, subject to certain conditions, before January 15, 2020, with respect to the new 2025
notes, and before June 15, 2020, with
respect to the new 2027 notes, Chesapeake may redeem up to 35% of
the aggregate principal amount of each series of the notes at a
price equal to 108% of the principal amount of the notes to be
redeemed using the net proceeds of certain equity offerings by
Chesapeake.
The closing of the private placement is expected to occur on
October 12, 2017 and is subject to
the satisfaction of customary closing conditions.
Chesapeake intends to use the net proceeds from the offering,
together with cash on hand and borrowings under its revolving
credit facility (if required), to finance tender offers for certain
of its senior notes announced September 27,
2017. If the tender offers are not consummated or the net
proceeds from the offering exceed the total consideration payable
in the tender offers, Chesapeake intends to use the remaining net
proceeds from the offering for general corporate purposes, which
may include the repayment of outstanding indebtedness under its
credit facility and the repayment or repurchase of other
indebtedness.
The notes are being offered and sold to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"), and outside the United
States to non-U.S. persons pursuant to Regulation S under
the Securities Act. The offer and sale of the notes and the related
subsidiary guarantees have not been registered under the Securities
Act or any state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and applicable state laws.
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
these securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of the securities will
be made in the United States only
by means of a private offering circular pursuant to Rule 144A under
the Securities Act, and outside the
United States to non-U.S. persons pursuant to Regulation S
under the Securities Act. This press release does not constitute an
offer to purchase or a solicitation of an offer to sell
Chesapeake's outstanding senior notes subject to the concurrent
tender offers. The concurrent tender offers are being made only by
and pursuant to, and on the terms and conditions set forth in, the
Offer to Purchase dated September 27,
2017 and the related letter of transmittal.
The closing of the private placement is expected to occur on
October 12, 2017 and is subject to
the satisfaction of customary closing conditions.
Chesapeake intends to use the net proceeds from the offering,
together with cash on hand and borrowings under its revolving
credit facility (if required), to finance tender offers for certain
of its senior notes announced September 27,
2017. If the tender offers are not consummated or the net
proceeds from the offering exceed the total consideration payable
in the tender offers, Chesapeake intends to use the remaining net
proceeds from the offering for general corporate purposes, which
may include the repayment of outstanding indebtedness under its
credit facility and the repayment or repurchase of other
indebtedness.
The notes are being offered and sold to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"), and outside the United
States to non-U.S. persons pursuant to Regulation S under
the Securities Act. The offer and sale of the notes and the related
subsidiary guarantees have not been registered under the Securities
Act or any state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and applicable state laws.
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
these securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of the securities will
be made in the United States only
by means of a private offering circular pursuant to Rule 144A under
the Securities Act, and outside the
United States to non-U.S. persons pursuant to Regulation S
under the Securities Act. This press release does not constitute an
offer to purchase or a solicitation of an offer to sell
Chesapeake's outstanding senior notes subject to the concurrent
tender offers. The concurrent tender offers are being made only by
and pursuant to, and on the terms and conditions set forth in, the
Offer to Purchase dated September 27,
2017 and the related letter of transmittal.
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. The company
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 use of proceeds 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 market conditions, results of tender offers or by
inaccurate or changed assumptions or by known or unknown risks and
uncertainties (including 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), that could cause
actual results to differ materially 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