Chesapeake to Sell $2.3B of Senior Notes
Chesapeake Energy Corp. intends to offer $2.3 billion of senior notes to help fund a tender offer for roughly $938 million in outstanding senior notes.
The natural-gas producer said it plans to issue the $2.3 billion of senior notes in three separate series: one maturing in 2016, another maturing in 2021 and the last maturing in 2023.
The company also launched a tender offer for all of the $464.1 million principal amount outstanding in 7.625% senior notes due 2013 and all of the $473.7 million principal amount outstanding in 6.875% senior notes due 2018.
The total price per $1,000 principal amount, including a $30 early-tender premium, will be $1,020.00 for the 2013 notes and $1,074.50 for the 2018 notes.
The company said the remaining proceeds will be used to redeem its 6.775% senior notes due 2019, pending a favorable ruling in a declaratory judgment playing out in U.S. District Court in New York.
Chesapeake Energy wants to buy back $1.3 billion of the 2019 bonds. But a group of hedge funds have said the company failed to give proper notice to buy back the bonds and demanded a 30% premium, or roughly $400 million.
U.S. District Judge Paul Engelmayer, in a ruling Thursday, refused to declare that Chesapeake could redeem bonds at face value. But, he added it was "overwhelmingly clear" that Chesapeake cannot be forced to pay a premium in a game of "Gotcha." He asked to see more information.
Patrick McGee contributed to this report.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Chesapeake To Cut Rig Count, Bring Fewer Wells To Production (Aug 03)
- Chesapeake CEO: Downturn Challenges Helped Oil, Gas Companies (Mar 07)
- Chesapeake Energy Posts Smaller Quarterly Loss (Feb 23)