Chesapeake Energy widens discount on $2 billion term loan to 98

By Sara Rosenberg

New York, Nov. 6 - Chesapeake Energy Corp. revised the original issue discount on its $2 billion unsecured five-year covenant-light term loan (Ba3) to 98 from the 99 area, according to a market source.

Pricing on the loan was left unchanged at Libor plus 450 basis points with a 1.25% Libor floor.

The debt is still non-callable for one year, then at 102 in year two and 101 in year three.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Jefferies Finance LLC are leading the deal.

Proceeds will be used to repay an existing term loan and borrowings under a revolving credit facility.

The new term loan will allow the company to repay other unsecured debt, including 6.775% senior notes due 2019, 7.625% senior notes due 2013 and up to $1.2 billion of other senior unsecured debt.

Also, the loan will permit the company to refinance its existing senior unsecured debt with longer-dated senior unsecured notes.

Chesapeake Energy is an Oklahoma City-based oil and natural gas exploration and production company.

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