OKLAHOMA CITY, Sept. 29, 2016 /PRNewswire/ -- Chesapeake
Energy Corporation (NYSE:CHK) today announced that it has priced
its private placement to eligible purchasers of $1.1 billion aggregate principal amount of 5.5%
convertible senior notes due 2026. The private placement was
upsized from a previously announced amount of $850 million. The company also has granted the
initial purchasers a 30-day option to purchase up to an additional
$150 million aggregate principal
amount of notes.
The notes will be convertible, under certain specified
circumstances, into cash, Chesapeake common stock or a combination
of cash and Chesapeake common stock, at Chesapeake's election. The
conversion rate will initially equal 116.7134 shares of common
stock per $1,000 principal amount of
notes (equivalent to an initial conversion price of approximately
$8.57 per share of common stock). The
conversion rate will be subject to adjustment in certain events but
will not be adjusted for any accrued and unpaid interest.
The notes will bear interest at a rate of 5.5% per annum. The
notes will mature on September 15,
2026 and may not be redeemed by Chesapeake prior to
September 15, 2019. Chesapeake may
redeem for cash all or part of the notes, at its option, on or
after September 15, 2019 if the last
reported sale price of its common stock for at least 20 trading
days (whether or not consecutive) during the period of 30
consecutive trading days ending on, and including, the trading day
immediately preceding the date on which Chesapeake provides notice
of redemption exceeds 130% of the applicable conversion price for
the notes on each of such 20 trading days. The redemption price
will equal 100% of the principal amount of the notes to be
redeemed, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. No sinking fund is provided for the
notes.
The closing of the private placement is expected to occur on
October 5, 2016 and is subject to the
satisfaction of customary closing conditions.
Chesapeake intends to use the net proceeds from the offering for
general corporate purposes, which may include debt repurchases and
the repayment of its credit facility and senior notes with
near-term maturities as they become due.
The notes are being offered and sold to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"). The offer and sale of the notes, the related subsidiary
guarantees and the shares of common stock issuable upon conversion
of the notes have not been, and will not be, registered under the
Securities Act or any state securities laws and may not be offered
or sold in the United States
absent registration or an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state laws.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of the securities will
be made only by means of a private offering circular pursuant to
Rule 144A under the Securities Act.
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.
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Brad Sylvester,
CFA
|
Gordon
Pennoyer
|
(405)
935-8870
|
(405)
935-8878
|
ir@chk.com
|
media@chk.com
|
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SOURCE Chesapeake Energy Corporation