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 $400,000,000
aggregate purchase price, exclusive of accrued interest (the
"Short-Dated Tender Cap"), of 6.25% Euro-denominated Senior Notes
due 2017, 6.5% Senior Notes due 2017 and 7.25% Senior Notes due
2018, collectively (the "Priority 1 Notes"), and no more than
$250,000,000 aggregate purchase
price, exclusive of accrued interest (the "Long-Dated Tender Cap"),
of Floating Rate Senior Notes due 2019 (the "Priority 2 Notes"),
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 (collectively, the
"Priority 3 Notes" and, together with the Priority 2 Notes, the
"Long-Dated Notes"), will be purchased in the Tender Offers. For
purposes of determining the application of the Short-Dated Tender
Cap, the Aggregate Maximum Purchase Amount and proration, the
aggregate purchase price (exclusive of accrued interest) to be paid
in Euros for the 6.25% Euro-denominated Senior Notes due 2017 will
be converted into U.S. dollars at an exchange ratio of $1.1162 to €1,000 as of 5:00 p.m., New York
City time, on August 12, 2016,
as set forth by the Bloomberg EURUSD Spot Exchange Rate. The
Priority 3 Notes are subject to an additional cap on the aggregate
purchase price (exclusive of accrued interest) of such Notes that
prohibits the aggregate principal amount of such Notes accepted for
purchase on any Settlement Date (as defined below) from exceeding
the aggregate principal amount of (i) the Priority 1
Notes and Priority 2 Notes accepted for purchase under the
Tender Offers and (ii) Other Notes (as defined below) accepted
for purchase in the Concurrent Tender Offers (as defined below)
(the "Priority 3 Tender Cap" and, together with the Short-Dated
Tender Cap and the Long-Dated Tender Cap, the "Tender Caps" and
each individually, a "Tender Cap"). 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.
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
|
The following table sets forth certain terms of the Tender
Offers:
Series of
Notes
|
CUSIP Number/
ISIN
|
Aggregate
Principal
Amount
Outstanding
|
Tender
Caps(1)
|
Acceptance
Priority
Level
|
Tender Offer
Consideration(2)
|
Early Tender
Premium(2)
|
Total
Consideration(2)(3)
|
|
|
|
|
|
|
|
|
6.25%
Euro-denominated Senior Notes due 2017
|
XS0273933902
|
€302,108,000
|
$400,000,000
|
1
|
€970.00
|
€30.00
|
€1,000.00
|
6.5% Senior Notes due
2017
|
165167BS5
|
$315,126,000
|
1
|
$970.00
|
$30.00
|
$1,000.00
|
7.25% Senior Notes
due 2018
|
165167CC9
|
$531,138,000
|
1
|
$965.00
|
$30.00
|
$995.00
|
Floating Rate Senior
Notes due 2019
|
165167CM7
|
$948,501,000
|
$250,000,000
|
2
|
$885.00
|
$30.00
|
$915.00
|
6.625% Senior Notes
due 2020
|
165167CF2
|
$822,087,000
|
3
|
$815.00
|
$30.00
|
$845.00
|
6.875% Senior Notes
due 2020
|
165167BU0
165167BT3
USU16450AQ87
|
$302,163,000
|
3
|
$815.00
|
$30.00
|
$845.00
|
6.125% Senior Notes
due 2021
|
165167CG0
|
$584,346,000
|
3
|
$782.50
|
$30.00
|
$812.50
|
5.375% Senior Notes
due 2021
|
165167CK1
|
$276,171,000
|
3
|
$737.50
|
$30.00
|
$767.50
|
4.875% Senior Notes
due 2022
|
165167CN5
|
$607,188,000
|
3
|
$722.50
|
$30.00
|
$752.50
|
5.75% Senior Notes
due 2023
|
165167CL9
|
$384,390,000
|
3
|
$732.50
|
$30.00
|
$762.50
|
|
|
|
|
|
|
|
|
(1)
|
The $400,000,000
Short-Dated Tender Cap applies to the aggregate purchase price
(exclusive of accrued interest) of the Priority 1 Notes,
collectively, and the $250,000,000 Long-Dated Tender Cap applies to
the aggregate purchase price (exclusive of accrued interest) of the
Long-Dated Notes, collectively. In addition, the Priority 3 Notes
accepted for purchase are subject to the Priority 3 Tender Cap. For
purposes of determining the application of the Short-Dated Tender
Cap, the Aggregate Maximum Purchase Amount and proration, the
aggregate purchase price (exclusive of accrued interest) to be paid
in Euros for the 6.25% Euro-denominated Senior Notes due 2017 will
be converted into U.S. dollars at an exchange ratio of $1.1162 to
€1,000 as of 5:00 p.m., New York City time, on August 12, 2016, as
set forth by the Bloomberg EURUSD Spot Exchange Rate.
|
|
|
(2)
|
Per €1,000 principal
amount of 6.25% Euro-denominated Senior Notes due 2017 and $1,000
principal amount of Notes (other than the 6.25% Euro-denominated
Senior Notes due 2017) validly tendered and accepted for purchase
in the applicable Tender Offer (exclusive of any accrued interest,
which will be paid in addition to the Tender Offer Consideration or
the Total Consideration, as applicable, to, but not including, the
applicable Settlement Date). Subject to the Aggregate Maximum
Purchase Amount, the Tender Caps and proration described in the
Offer to Purchase, notes validly tendered at or prior to the Early
Tender Date (as defined below) will be accepted for purchase before
any notes validly tendered after the Early Tender Date.
|
|
|
(3)
|
Includes the
applicable Early Tender Premium.
|
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, but not
after, 5:00 p.m., New York City time, on August 25, 2016 (such date and time with respect
to a Tender Offer, as it may be extended for such Tender Offer, the
"Withdrawal Deadline"). Holders of Notes who tender their
Notes after the Withdrawal Deadline, but prior to the Expiration
Date, may not withdraw their tendered Notes, except for certain
limited circumstances where additional withdrawal rights are
required by law.
Subject to the terms and conditions of the Tender Offers, the
consideration for each €1,000 principal amount of 6.25%
Euro-denominated Senior Notes due 2017 and $1,000 principal amount of Notes (other than the
6.25% Euro-denominated Senior Notes due 2017) validly tendered (and
not validly withdrawn) and accepted for purchase pursuant to the
Tender Offers will be the tender offer consideration for the
applicable series of Notes set forth in the table above (with
respect to each series of Notes, the "Tender Offer
Consideration"). Holders of Notes that are validly tendered
(and not validly withdrawn) at or prior to 5:00 p.m., New York
City time, on August 25, 2016
(such date and time with respect to a Tender Offer, as it may be
extended for such Tender Offer, the "Early Tender Date") and
accepted for purchase pursuant to the Tender Offers will receive
the applicable Tender Offer Consideration plus the early tender
premium for the applicable series of Notes set forth in the table
above (with respect to each series of Notes, the "Early Tender
Premium" and, together with the applicable Tender Offer
Consideration, the "Total Consideration"). Holders of Notes
validly tendered after the Early Tender Date, but at or prior to
the Expiration Date, and accepted for purchase pursuant to the
Tender Offers will receive the applicable Tender Offer
Consideration, but not the Early Tender Premium for the applicable
series of Notes. No tenders will be valid if submitted after
the Expiration Date.
In addition to the Tender Offer Consideration or the Total
Consideration, as applicable, all Holders of Notes accepted for
purchase pursuant to the Tender Offers will, on the Early
Settlement Date (as defined below) or the Final Settlement Date (as
defined below), as applicable, 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 Early Settlement
Date or the Final Settlement Date, as applicable (the "Accrued
Interest").
Chesapeake reserves the right, in its sole discretion, to
increase or decrease the Aggregate Maximum Purchase Amount and any
Tender Cap at any time without extending the Early Tender Date or
the Withdrawal Deadline or otherwise reinstating withdrawal rights
for any Tender Offer, subject to compliance with applicable law,
which could result in the Company's purchasing a greater or lesser
amount of Notes in the Tender Offers. If Chesapeake changes
the Aggregate Maximum Purchase Amount or any Tender Cap, it does
not expect to extend the Withdrawal Deadline, subject to applicable
law.
Chesapeake reserves the right, in its sole discretion, at any
point following the Early Tender Date and prior to the Expiration
Date, to accept for purchase any Notes validly tendered (and not
validly withdrawn) at or prior to the Early Tender Date (the date
of such acceptance and purchase, the "Early Settlement Date"),
subject to the Aggregate Maximum Purchase Amount, the Tender Caps,
the Acceptance Priority Levels and proration as described in the
Offer to Purchase. The Early Settlement Date will be determined at
Chesapeake's option, assuming the conditions to the Tender Offers
have been either satisfied or waived by Chesapeake at or prior to
the Early Settlement Date. Chesapeake currently does not expect to
have an Early Settlement Date. Irrespective of whether Chesapeake
chooses to exercise its option to have an Early Settlement Date,
Chesapeake will purchase any remaining 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 "Final Settlement Date"; the Final Settlement
Date and the Early Settlement Date each being a "Settlement Date"),
subject to the Aggregate Maximum Purchase Amount, the Tender Caps,
the Acceptance Priority Levels and proration as described in the
Offer to Purchase. The Final 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 and Notes
having an aggregate purchase price (exclusive of Accrued Interest)
equal to the Aggregate Maximum Purchase Amount are not purchased on
the Early Settlement Date.
Subject to the Aggregate Maximum Purchase Amount, the Tender
Caps and proration as described in the Offer to Purchase, all Notes
validly tendered at or prior to the Early Tender Date having a
higher Acceptance Priority Level will be accepted for purchase
before any Notes validly tendered at or prior to the Early Tender
Date having a lower Acceptance Priority Level are accepted for
purchase, and all Notes validly tendered after the Early Tender
Date having a higher Acceptance Priority Level will be accepted for
purchase before any Notes validly tendered after the Early Tender
Date having a lower Acceptance Priority Level are accepted for
purchase. However, even if the Tender Offers are not fully
subscribed as of the Early Tender Date, subject to the Aggregate
Maximum Purchase Amount and the Tender Caps, Notes validly tendered
at or prior to the Early Tender Date will be accepted for purchase
before any Notes validly tendered after the Early Tender Date are
accepted for purchase, even if such Notes validly tendered after
the Early Tender Date have a higher Acceptance Priority Level than
Notes validly tendered at or prior to the Early Tender Date.
Therefore, if the aggregate purchase price (exclusive of Accrued
Interest) of Notes validly tendered at or prior to the Early Tender
Date equals or exceeds the Aggregate Maximum Purchase Amount,
Chesapeake will not accept for purchase any Notes tendered after
the Early Tender Date, and if the aggregate purchase price
(exclusive of Accrued Interest) of Priority 1 Notes, Long-Dated
Notes or Priority 3 Notes validly tendered at or prior to the Early
Tender Date equals or exceeds the Short-Dated Tender Cap, the
Long-Dated Tender Cap or the Priority 3 Tender Cap, as applicable,
Chesapeake will not accept for purchase Priority 1 Notes,
Long-Dated Notes or Priority 3 Notes, as applicable, tendered after
the Early Tender Date. Additional information about the application
of the Aggregate Maximum Purchase Amount, Acceptance Priority
Levels, Tender Caps and proration is set forth in the Offer to
Purchase.
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 Tender Offer Consideration and 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 2.5%
Contingent Convertible Senior Notes due 2037 and 2.25% Contingent
Convertible Senior Notes due 2038 (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.
None of Chesapeake, its board of directors, its officers, the
dealer manager, the depositary, the information agent or the
trustees 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