Boston, MA 04/11/2014 (wallstreetpr) – The second largest gas producers in the US Chesapeake Energy Corporation (NYSE:CHK) announced via press release that is has decided to price its public offering of $3.0 billion senior notes at par value. The notes would be issued in two separate tranches. The first tranch would be $1.5 billion Floating Rate Senior Notes due 2019 which would be issued with a coupon of LIBOR plus 3.25%, which would be reset every quarter. The second tranche would be another $1.5 billion fixed rate note with a coupon 4.875% Senior Notes due 2022. The company expects the issuance and delivery of the two tranches to occur by April 24, 2014, subject to customary closing conditions.
Chesapeake Energy Corporation (NYSE:CHK) intends to use the proceeds from the offering to reduce its cost of debt by repaying its existing unsecured term loan, which includes redemption of 6.875% Senior Notes due 2018 and purchase the remainder portion of 9.50% Senior Notes due 2015 which are part of the concurrent tender offer for these notes. If after purchasing the aforementioned preexisting securities there is some amount left then the remainder would be used for general corporate purposes, which includes but is not limited to be used to further reduction of indebtedness by additional purchases or redemptions of previously issued securities or for general corporate purposes as they deem fit.
These senior notes are being offered subject to shelf registration statement filed August 7, 2013 with the U.S. market regulator I.e. the Securities and Exchange Commission being accepted. Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. are acting as joint book-runners for thie $1.5 billion notes which forms the first part of the offering and is due 2019. For the fixed rate $1.5 billion notes due 2022 in addition to Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Mitsubishi UFJ Securities, (USA) Inc. are also acting as joint book-runners.
