Chesapeake sees early tenders for $616.2 million Brazos notes

By Marisa Wong

Los Angeles, Dec. 20 – Chesapeake Energy Corp. said holders had tendered $616.2 million, or 99.74%, of the 6 7/8% senior notes due 2025 issued by wholly owned subsidiaries Brazos Valley Longhorn, LLC and Brazos Valley Longhorn Finance Corp. as of 5 p.m. ET on Dec. 19, the early tender date of its previously announced tender offer for any and all of the $617.81 million outstanding notes.

As a result, Chesapeake also obtained the necessary consents to amend the notes, according to a Friday press release.

In addition, the company announced that the financing condition has been met and that it has elected to have an early settlement date of Dec. 23 for notes tendered by the early tender date.

Holders who tendered their notes by the early tender time will receive $1,000 per $1,000 principal amount. The total consideration includes an early tender premium of $50 per $1,000 of notes.

As announced on Dec. 10, the company increased the tender consideration to $950 per $1,000 principal amount of existing notes from $920 per $1,000 principal amount, making the total consideration $1,000 instead of $970 previously.

The tender offer expires at 11:59 p.m. ET on Jan. 6.

Holders will also receive accrued interest.

As announced on Dec. 4, Chesapeake is conducting a simultaneous solicitation of consents from each registered holder with respect to proposed amendments to the indenture governing the notes.

The supplemental indenture containing the proposed amendments will amend the existing indenture to, among other things, eliminate substantially all of the restrictive covenants, some events of default and some other provisions currently applicable to the notes.

If holders tender their notes in the tender offer, they will be deemed to have delivered their related consents. A holder may not deliver consents without tendering the related notes under the offer and may not tender notes without delivering the related consents.

Tenders and consents may no longer be withdrawn.

The tender offer and consent solicitation are conditioned on, among other things, Chesapeake receiving consents from holders of a majority of the outstanding notes at or prior to the early tender date and Chesapeake obtaining committed financing for floating-rate term loans totaling $1.5 billion, as previously reported.

The tender offer and consent solicitation are being made in connection with a concurrent secured term loan financing and a concurrent offer to exchange Chesapeake’s 8% senior notes due 2027, 8% senior notes due 2026, 8% senior notes due 2025, 7˝% senior notes due 2026 and 7% senior notes due 2024 for new 11˝% senior secured second-lien notes due 2025 to be issued by Chesapeake.

The tender offer and consent solicitation are not contingent or conditioned on the completion of the Chesapeake exchange offers.

J.P. Morgan Securities LLC (212 834-3424 collect or 866 834-4666 toll-free) is acting as the dealer manager and solicitation agent in the tender offer and consent solicitation. Global Bondholder Services Corp. (866 470-4300 toll-free or 212 430-3774 collect) is the depositary and the information agent.

The natural gas producer is based in Oklahoma City.

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