Chesapeake Loan Increased from $3B to $4B

Chesapeake Energy on Tuesday confirmed reports it had increased the size of a previously announced unsecured term loan from Goldman Sachs Bank USA and affiliates of Jefferies Group, Inc. from $3 billion to $4 billion.

The company will use the loan to repay borrowings under the company's existing corporate revolving credit facility and for general corporate purposes. Chesapeake will use some proceeds from planned asset sales to repay the loan in full before the end of this year.

McClendon said, "We appreciate this strong vote of confidence from investors. As discussed in yesterday's conference call, this will give us greatly enhanced financial flexibility to execute our planned asset sales from a position of strength and to complete our transformation from a natural gas-focused producer to a more balanced liquids-focused producer."

Earlier Tuesday, Standard & Poor's downgraded its rating on Chesapeake for the second time in recent months due to concerns over the company's ability to fund its operations.