Chesapeake Energy Corporation (NYSE:CHK) today announced it has
increased the size of a previously announced unsecured term loan from
Goldman Sachs Bank USA and affiliates of Jefferies Group, Inc. from $3.0
billion to $4.0 billion based on strong investor demand. The loan was
syndicated to a large group of institutional investors and priced at 97%
of par. The net proceeds of the loan to Chesapeake, after customary fees
and syndication costs, of approximately $3.8 billion will be used to
repay borrowings under the company′s existing corporate revolving credit
facility and for general corporate purposes. The loan carries an initial
variable annual interest rate through December 31, 2012 of LIBOR plus
7.0%, which is currently 8.5% given the 1.5% LIBOR floor in the loan
agreement. The loan, which ranks pari passu with Chesapeake′s
outstanding senior notes, matures on December 2, 2017 and may be repaid
at any time in 2012 without penalty at par value.
Chesapeake expects to use a portion of the proceeds from planned asset
sales to repay the loan in full before the end of 2012. Giving effect to
the increase in the size of the loan, the company currently has more
than $4.7 billion of liquidity including unrestricted cash on hand and
available borrowing capacity under its revolving bank credit facilities.
Aubrey K. McClendon, Chairman and Chief Executive Officer, 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.?
Chesapeake Energy Corporation (NYSE:CHK) is the second-largest
producer of natural gas, a Top 15 producer of oil and natural gas
liquids 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 Marcellus,
Haynesville, Bossier, and Barnett natural gas shale plays and in the
Eagle Ford, Utica, Mississippi Lime, Granite Wash, Cleveland, Tonkawa,
Niobrara, Bone Spring, Avalon, Wolfcamp and Wolfberry unconventional
liquids plays.The company has also vertically integrated
its operations and owns substantial marketing, midstream and oilfield
services businesses directly and indirectly through its subsidiaries
Chesapeake Energy Marketing, Inc., Chesapeake Midstream Development,
L.P. and Chesapeake Oilfield Services, L.L.C. and its affiliate
Chesapeake Midstream Partners, L.P. (NYSE:CHKM).Further
information is available at where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and news releases.
This news release includes 'forward-looking statements' that give
Chesapeake's current expectations.Although we believe the
expectations 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 assumptions or by known or unknown risks
and uncertainties, and actual results may differ from the expectation
expressed.We may be unable to complete our planned asset
monetizations as scheduled or at all, and they may not generate the
proceeds we are anticipating.In such event, we would be required
to seek funds to repay the term loan from other sources, including
alternative asset monetizations.Our ability to consummate asset
monetizations is dependent upon market conditions and other factors
beyond our control.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.
