OKLAHOMA CITY, Dec. 6, 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 $1,200,000,000
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 $150,000,000
aggregate purchase price, exclusive of accrued interest (the
"Priority 2 Cap"), of 6.625% Senior Notes due 2020 and 6.875%
Senior Notes due 2020 (the "Priority 2 Notes"), and no more than
$150,000,000 aggregate purchase
price, exclusive of accrued interest (the "Priority 3 Tender Cap"),
of 6.125% Senior Notes due 2021, 5.375% Senior Notes due 2021,
4.875% Senior Notes due 2022, 8.00% Senior Secured Second Lien
Notes due 2022 and 5.75% Senior Notes due 2023 (the "Priority 3
Notes" and, together with the Priority 2 Notes, the "Long-Dated
Notes"), will be purchased in the Tender Offers. The Long-Dated
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) 6.5% Senior Notes due 2017,
7.25% Senior Notes due 2018 and Floating Rate Senior Notes due 2019
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 "Long-Dated Tender Cap" and,
together with the Priority 2 Tender Cap and the Priority 3 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 December 6, 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
Caps(1)
|
Acceptance
Priority
Level
|
Tender Offer
Consideration(2)
|
Early Tender
Premium(2)
|
Total
Consideration(2)(3)
|
|
|
|
|
|
|
|
|
6.5% Senior Notes due
2017
|
165167BS5
|
$222,752,000
|
N/A
|
1
|
$1,004.00
|
$30.00
|
$1,034.00
|
7.25% Senior Notes
due 2018
|
165167CC9
|
$349,065,000
|
1
|
$1,055.00
|
$30.00
|
$1,085.00
|
Floating Rate Senior
Notes due 2019
|
165167CM7
|
$504,179,000
|
1
|
$960.00
|
$30.00
|
$990.00
|
6.625% Senior Notes
due 2020
|
165167CF2
|
$806,882,000
|
$150,000,000
|
2
|
$980.00
|
$30.00
|
$1,010.00
|
6.875% Senior Notes
due 2020
|
165167BU0
165167BT3
USU16450AQ87
|
$291,047,000
|
|
2
|
$965.00
|
$30.00
|
$995.00
|
6.125% Senior Notes
due 2021
|
165167CG0
|
$554,348,000
|
$150,000,000
|
3
|
$932.50
|
$30.00
|
$962.50
|
5.375% Senior Notes
due 2021
|
165167CK1
|
$272,264,000
|
3
|
$892.50
|
$30.00
|
$922.50
|
4.875% Senior Notes
due 2022
|
165167CN5
|
$453,055,000
|
3
|
$865.00
|
$30.00
|
$895.00
|
8.00% Senior Secured
Second Lien Notes due 2022
|
165167CQ8
|
$2,425,206,000
|
|
3
|
$1,030.00
|
$30.00
|
$1,060.00
|
5.75% Senior Notes
due 2023
|
165167CL9
|
$338,852,000
|
|
3
|
$885.00
|
$30.00
|
$915.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The $150,000,000
Priority 2 Tender Cap applies to the aggregate purchase price
(exclusive of accrued interest) of the Priority 2 Notes,
collectively, and the $150,000,000
Priority 3 Tender Cap applies to the aggregate purchase price
(exclusive of accrued interest) of the Priority 3 Notes,
collectively. In addition, the Priority 2 Notes and the Priority 3
Notes accepted for purchase are subject to the Long-Dated Tender
Cap.
(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 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 January 4, 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 December 19, 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 Notes 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 December 19, 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 2 Notes, Priority 3
Notes or Long-Dated Notes validly tendered at or prior to the Early
Tender Date equals or exceeds the Priority 2 Tender Cap, the
Priority 3 Tender Cap or the Long-Dated Tender Cap, as applicable,
Chesapeake will not accept for purchase Priority 2 Notes, Priority
3 Notes or Long-Dated 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 private offering of $750,000,000 aggregate principal amount of Senior
Notes due 2025 to finance at least $700,000,000 of the payment of the Tender Offer
Consideration and the Total Consideration.
Chesapeake also announced today that it has commenced separate
tender offers to purchase its outstanding 2.5% Contingent
Convertible Senior Notes due 2037 and 2.25% Contingent Convertible
Senior Notes due 2038 (the "Concurrent Tender Offers"). Chesapeake
expects to use cash on hand to fund the consideration in the
Concurrent Tender Offers. Chesapeake's obligation to consummate the
Tender Offers is not subject to completion of the Concurrent Tender
Offers.
Deutsche Bank Securities Inc. 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 Deutsche Bank Securities Inc. at (toll-free)
(855) 287-1922 or (collect) (212) 250-7527. 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.
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
securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of securities will be
made only by means of a private offering circular pursuant to Rule
144A and Regulation S under the Securities Act of 1933, as
amended.
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 results of the proposed
notes offering. 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
ability to consummate the proposed notes offering, 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.
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