Chesapeake Energy Corporation Announces Cash Tender Offers for up to $1.0 Billion of Contingent Convertible Senior Notes
Chesapeake Energy Corporation (NYSE:CHK) today announced that it has
commenced tender offers to acquire a portion of the outstanding
principal amount of each series of its contingent convertible senior
notes listed in the table below (collectively, the 'Convertible Notes?).
Convertible Notes | CUSIP Number(s) | Principal Amount Outstanding | Series Maximum | Conversion Factor | Tender Premium(1) | Maximum Purchase Price(2) | ||||||||||||
2.75% Contingent Convertible Senior Notes due 2035 | 165167BW6 | $451,071,000 | $300,000,000 | 17.9952 | $577.00 | $1,240.00 | ||||||||||||
2.50% Contingent Convertible Senior Notes due 2037(3) | 165167BZ9
| $1,377,979,000 | $350,000,000 | 16.5351 | $556.00 | $1,165.00 | ||||||||||||
2.25% Contingent Convertible Senior Notes due 2038 | 165167CB1 | $612,118,000 | $350,000,000 | 7.5678 | $688.00 | $967.00 |
(1) Per $1,000 in principal amount of Convertible Notes
validly tendered (and not validly withdrawn) and accepted for purchase
in the tender offers.
(2) Per $1,000 in principal amount of Convertible Notes
validly tendered (and not validly withdrawn) and accepted for purchase
in the tender offers, and excluding accrued and unpaid interest from the
last interest payment date, which will be paid in addition to the
purchase price to, but not including, the applicable settlement date of
the tender offers.
(3) For the purposes of the tender offers, including
proration, and consistent with their terms, all of the 2.50% Contingent
Convertible Senior Notes due 2037 will be treated as a single series,
notwithstanding any differences in CUSIP numbers.
Holders whose Convertible Notes are validly tendered (and not validly
withdrawn) and accepted for purchase by Chesapeake before the expiration
date of the tender offers, which is 11:59 p.m., New York City time, on
April 29, 2011 (unless extended or earlier terminated), will receive in
cash, for each $1,000 in principal amount of Convertible Notes tendered,
consideration equal to the sum of:
the arithmetic average volume weighted price per share of the
Company's common stock beginning on April 20, 2011 and ending on April
27, 2011, but excluding April 22, 2011 (calculated as described in the
Offer to Purchase), multiplied by the applicable Conversion Factor set
forth in the table above; plus
a fixed cash amount equal to the applicable Tender Premium set forth
in the table above;
provided that in no event will the purchase price per $1,000 in
principal amount of Convertible Notes be more than the applicable
Maximum Purchase Price set forth in the table above. In addition,
holders will receive in respect of their Convertible Notes that are
accepted for purchase, accrued and unpaid interest on the principal
amount of the accepted Convertible Notes from the last interest payment
date to, but not including, the applicable settlement date of the tender
offers.
The Company will determine the final purchase price promptly after the
close of trading on the New York Stock Exchange on April 27, 2011 (the
'Pricing Date?) and will announce the final purchase price no later than
9:00 a.m., New York City time, on the business day immediately following
the Pricing Date. The final purchase price also will be posted at such
time on the internet at www.gbsc-usa.com/chesapeake
and available from the Information Agent for the tender offers. Prior to
determining the final purchase price, an indicative purchase price will
be posted on the website www.gbsc-usa.com/chesapeake
and will be available from the Information Agent for the tender offers.
The principal amount of each series of Convertible Notes that Chesapeake
is offering to purchase in the tender offers is set forth in the table
above in the column entitled 'Series Maximum.' If the aggregate
principal amount of Convertible Notes of any series validly tendered
(and not validly withdrawn) and accepted for purchase by Chesapeake
exceeds the Series Maximum for such series of Convertible Notes,
Chesapeake will accept tendered notes of such series on a pro rata
basis, as more fully set forth in the Offer to Purchase.
Chesapeake also announced today that it has commenced separate tender
offers to acquire up to $1.0 billion in principal amount of its 7.625%
Senior Notes due 2013, 9.500% Senior Notes due 2015, 6.250%
Euro-denominated Senior Notes due 2017, 6.500% Senior Notes due 2017,
6.875% Senior Notes due 2018, 7.250% Senior Notes due 2018 and 6.625%
Senior Notes due 2020 (collectively, the 'Non-Convertible Notes').
Chesapeake currently anticipates retiring approximately $2.0 billion in
aggregate principal amount of the Convertible Notes and the
Non-Convertible Notes in the tender offers for the Convertible Notes and
such concurrent tender offers. None of the tender offers for the
Convertible Notes are conditioned on the results of the separate
concurrent tender offers for the Non-Convertible Notes. This
announcement is not an offer to purchase or a solicitation of an offer
to sell the Convertible Notes, the Non-Convertible Notes or any other
securities. The tender offers are only being made pursuant to the terms
of the Offer to Purchase and the related Letter of Transmittal.
The complete terms and conditions of the tender offers are set forth in
the Offer to Purchase and the related Letter of Transmittal dated today,
which are being sent to holders of the Convertible Notes. Holders are
urged to read the tender offer documents carefully before making any
decision with respect to the tender offers. Holders must make their own
decisions as to whether to participate in the tender offers, and if they
decide to do so, the principal amount of the Convertible Notes to tender.
Holders may obtain copies of the Offer to Purchase and the related
Letter of Transmittal online at the Securities and Exchange Commission′s
('SEC's?) website at www.sec.gov
as exhibits to the Tender Offer Statement on Schedule TO filed by
Chesapeake with the SEC. Holders may also obtain copies of the Offer to
Purchase and the related Letter of Transmittal from the Depositary and
Information Agent for the tender offers, Global Bondholder Services
Corporation, at (212) 430-3774 (collect, for banks and brokers only) and
(866) 470-4200 (toll free).
Chesapeake has retained Deutsche Bank Securities Inc., Citigroup Global
Markets Inc. and RBS Securities Inc. as the Dealer Managers for the
tender offers. Questions regarding the tender offers may be directed to
the Dealer Managers at the addresses and telephone numbers set forth
below:
By Telephone:
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By Telephone:
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By Telephone:
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None of Chesapeake, the Dealer Managers, the Depositary and Information
Agent or any other person makes any recommendation as to whether holders
of the Convertible Notes should participate in the tender offers, and no
one has been authorized to make such a recommendation.
This news release contains forward-looking statements, including the
expected consummation of the tender offers and the anticipated principal
amounts of notes to be retired.Forward-looking statements give
our current expectations or forecasts of future events. Although we
believe our forward-looking statements are reasonable, they can be
affected by inaccurate assumptions or by known or unknown risks and
uncertainties, and actual results may differ from the expectations
expressed. See the 'Risk Factors' discussion in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2010 filed with the SEC
on March 1, 2011 for a discussion of risk factors that affect our
business.We caution you not to place undue reliance on our
forward-looking statements, which speak only as of the date of this news
release.
Chesapeake Energy Corporation is the second-largest producer of
natural gas and the most active driller of new wells in the U.S.Headquartered
in Oklahoma City, the company's operations are focused on discovering
and developing unconventional natural gas and oil fields onshore in the
U.S.Chesapeake owns leading positions in the Barnett,
Haynesville, Marcellus and Bossier natural gas shale plays and in the
Eagle Ford, Granite Wash, Tonkawa, Cleveland, Mississippian, Wolfcamp,
Bone Spring, Avalon and Niobrara unconventional liquids plays.The
company has also vertically integrated its operations and owns
substantial midstream, compression, drilling and oilfield service assets.Further information is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information and presentations and all recent press releases.
Chesapeake Energy Corporation
Investor Contacts:
Jeffrey
L. Mobley, CFA, 405-767-4763
jeff.mobley@chk.com
or
John
J. Kilgallon, 405-935-4441
john.kilgallon@chk.com
or
Media
Contact:
Jim Gipson, 405-935-1310
jim.gipson@chk.com
