OKLAHOMA CITY, Aug. 15, 2016 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE: CHK) announced today that it has
commenced cash tender offers (collectively, the "Tender Offers,"
and each offer to purchase a series of notes individually, a
"Tender Offer") to purchase up to $500,000,000 aggregate purchase price, exclusive
of accrued interest (the "Aggregate Maximum Purchase Amount"), of
the outstanding notes of Chesapeake set forth in the table below
(collectively, the "Notes").
No more than $275,000,000
aggregate purchase price, exclusive of accrued interest (the "2038
Tender Cap"), of 2.25% Contingent Convertible Senior Notes due 2038
(the "2038 Notes") will be purchased in the Tender Offers. The
terms and conditions of the Tender Offers are described in an Offer
to Purchase dated August 15, 2016
(the "Offer to Purchase") and the related Letter of
Transmittal.
The following table sets forth certain terms of the Tender
Offers:
Series of
Notes
|
CUSIP
Number
|
Aggregate
Principal Amount Outstanding
|
Tender Cap
(1)
|
Acceptance
Priority Level
|
Total
Consideration(2)
|
|
|
|
|
|
|
2.5% Contingent
Convertible Senior Notes due 2037
|
165167BZ9 /
165167CA3
|
$730,205,000
|
N/A
|
1
|
$1,000.00
|
2.25% Contingent
Convertible Senior Notes due 2038
|
165167CB1
|
$315,112,000
|
$275,000,000
|
2
|
$920.00
|
|
|
|
|
|
|
(1)
|
The 2038 Tender Cap
applies to the aggregate purchase price (exclusive of Accrued
Interest) of the 2038 Notes.
|
(2)
|
Per $1,000 principal
amount of Notes validly tendered and accepted for purchase in the
applicable Tender Offer (exclusive of any accrued interest, which
will be paid in addition to the Total Consideration (as defined
below) to, but not including, the Settlement Date (as defined
below).
|
The Tender Offers will expire at 11:59
p.m., New York City time,
on September 12, 2016 (such date and
time with respect to a Tender Offer, as it may be extended for such
Tender Offer, the "Expiration Date"). No tenders will be
valid if submitted after the Expiration Date. Tendered Notes
may be withdrawn from the Tender Offers at or prior to the
Expiration Date.
Subject to the terms and conditions of the Tender Offers, the
consideration for each $1,000
principal amount of Notes validly tendered (and not validly
withdrawn) and accepted for purchase pursuant to the Tender Offers
will be the total consideration for the applicable series of Notes
as set forth in the table above (with respect to each series of
Notes, the "Total Consideration"). In addition to the Total
Consideration, all Holders of Notes accepted for purchase pursuant
to the Tender Offers will, on the Settlement Date, also receive
accrued and unpaid interest on those Notes from the last interest
payment date with respect to those Notes to, but not including, the
Settlement Date ("Accrued Interest").
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
CHESAPEAKE ENERGY
CORPORATION
|
Brad Sylvester,
CFA
|
Gordon
Pennoyer
|
6100 North Western
Avenue
|
(405)
935-8859
|
(405)
935-8878
|
P.O. Box
18496
|
ir@chk.com
|
media@chk.com
|
Oklahoma City, OK
73154
|
Chesapeake will purchase any Notes that have been validly
tendered (and not validly withdrawn) at or prior to the
Expiration Date and accepted for purchase, subject to all
conditions to the Tender Offers having been either satisfied or
waived by Chesapeake, promptly following the Expiration Date (the
date of such acceptance and purchase, the "Settlement Date"),
subject to the Aggregate Maximum Purchase Amount, the 2038 Tender
Cap, the Acceptance Priority Levels and proration as described in
the Offer to Purchase. The Settlement Date is expected to occur on
the second business day following the Expiration Date, assuming the
conditions to the Tender Offers have been either satisfied or
waived by Chesapeake at or prior to the Expiration Date.
Subject to the Aggregate Maximum Purchase Amount and proration
as described in the Offer to Purchase, all 2.5% Contingent
Convertible Senior Notes due 2037 (the "2037 Notes") validly
tendered will be accepted for purchase before any 2038 Notes
validly tendered are accepted for purchase. Accordingly, if
the aggregate purchase price (exclusive of Accrued Interest) of
2037 Notes validly tendered at or prior to the Expiration Date
equals or exceeds the Aggregate Maximum Purchase Amount, Chesapeake
will not accept for purchase any 2038 Notes. If the aggregate
purchase price (exclusive of Accrued Interest) of 2037 Notes
validly tendered at or prior to the Expiration Date exceeds the
Aggregate Maximum Purchase Amount, 2037 Notes validly tendered will
be accepted for purchase on a pro rata basis, based on the
aggregate principal amount of 2037 Notes validly tendered.
Once all 2037 Notes validly tendered have been accepted for
purchase, subject to the Aggregate Maximum Purchase Amount, the
2038 Tender Cap and proration as described in the Offer to
Purchase, 2038 Notes validly tendered will be accepted for
purchase. If the aggregate purchase price (exclusive of Accrued
Interest) of 2037 Notes validly tendered is less than the Aggregate
Maximum Purchase Amount and the aggregate purchase price of 2037
Notes and 2038 Notes validly tendered exceeds the Aggregate Maximum
Purchase Amount, 2038 Notes validly tendered will be accepted for
purchase on a pro rata basis, based on the aggregate principal
amount of 2038 Notes validly tendered. If the aggregate
purchase price (exclusive of Accrued Interest) of 2038 Notes
validly tendered at or prior to the Expiration Date exceeds the
2038 Tender Cap, 2038 Notes validly tendered will be accepted for
purchase on a pro rata basis, based on the aggregate principal
amount of 2038 Notes validly tendered.
The Tender Offers are not conditioned upon a minimum amount of
Notes of any series, or a minimum amount of Notes of all series,
being tendered. However, the Tender Offers are subject to, and
conditioned upon, the satisfaction or waiver of certain conditions
described in the Offer to Purchase, including receipt by Chesapeake
of net proceeds from a concurrent secured term loan agreement on
terms satisfactory to Chesapeake in an amount sufficient to fund
the payment of the Total Consideration and to fund the
consideration for the Concurrent Tender Offers. The term loan
agreement is expected to be with one or more banks, investment
banks, insurance companies, mutual funds or other institutional
lenders providing for floating rate term loans aggregating
$1.0 billion. Such term loans are to
be secured by the same collateral as the liens on the collateral
securing the Company's existing revolving credit facility (with a
position in the collateral proceeds waterfall junior to the
revolving credit facility) and are to be guaranteed by the same
subsidiaries that guarantee, among other obligations, such
revolving credit facility.
Chesapeake also announced today that it has commenced separate
tender offers to acquire up to $500
million in aggregate purchase price of its outstanding 6.25%
Euro-denominated Senior Notes due 2017, 6.5% Senior Notes due 2017,
7.25% Senior Notes due 2018, Floating Rate Senior Notes due 2019,
6.625% Senior Notes due 2020, 6.875% Senior Notes due 2020, 6.125%
Senior Notes due 2021, 5.375% Senior Notes due 2021, 4.875% Senior
Notes due 2022 and 5.75% Senior Notes due 2023 (the "Concurrent
Tender Offers"). Chesapeake's obligation to consummate the Tender
Offers is not subject to completion of the Concurrent Tender
Offers.
Goldman, Sachs & Co. is acting as the dealer manager in the
Tender Offers. Global Bondholder Services Corporation has been
retained to serve as both the depositary and the information agent
for the Tender Offers. Persons with questions regarding the Tender
Offers should contact Goldman, Sachs & Co. at (toll-free) (800)
828-3182 or (collect) (212) 902-6941. Requests for copies of
the Offer to Purchase, the related Letter of Transmittal and other
related materials should be directed to Global Bondholder Services
Corporation at (toll-free) (866) 470-4200 or (collect) (212)
430-3774. Chesapeake will file a Tender Offer Statement on
Schedule TO with the Securities and Exchange Commission later
today. Chesapeake will make available to holders of the Notes,
directly or through the Depository Trust Company, documents
specifying the terms, conditions and procedures for validly
tendering and withdrawing Notes (copies of which will be attached
as exhibits to such Schedule TO). Note holders are encouraged to
read these documents carefully before deciding whether to tender
their Notes. Holders of the Notes and other interested parties may
obtain a free copy of these documents at the Securities and
Exchange Commission's website, www.sec.gov.
None of Chesapeake, its board of directors, its officers, the
dealer manager, the depositary, the information agent or the
trustee with respect to the Notes, or any of their respective
affiliates, makes any recommendation that holders tender or refrain
from tendering all or any portion of the principal amount of their
Notes, and no one has been authorized by any of them to make such a
recommendation. Holders must make their own decision as to whether
to tender their Notes and, if so, the principal amount of Notes to
tender. The Tender Offers are made only by the Offer to
Purchase and related Letter of Transmittal. This press
release is neither an offer to purchase nor a solicitation of an
offer to sell any notes in the Tender Offers. The Tender
Offers are not being made to holders of Notes in any jurisdiction
in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such
jurisdiction. In any jurisdiction in which the Tender Offers are
required to be made by a licensed broker or dealer, the Tender
Offers will be deemed to be made on behalf of Chesapeake by the
dealer manager or one or more registered brokers or dealers that
are licensed under the laws of such jurisdiction.
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 gathering
and compression businesses.
This news release includes "forward-looking statements" that
give the company's current expectations or forecasts of future
events, including the timing of the settlement and amounts to be
purchased in the Tender Offers and the amount and terms of the term
loan. 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 inaccurate or changed assumptions or by known or
unknown risks and uncertainties (including the satisfaction of
conditions precedent to completing the Tender Offers, including the
funding of the term loan, the ability to consummate any or all of
the Tender Offers and those stated in the company's Annual Report
on Form 10-K for the year ended December 31,
2015 and its other filings with the SEC), and actual results
may differ 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.
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SOURCE Chesapeake Energy Corporation