By Kenneth Lim
Boston, May 10 - Chesapeake Energy Corp. priced $1 billion of 30-year convertible senior notes Thursday within talk to yield 2.5% with an initial conversion premium of 50%.
The convertibles were offered at par and priced before the market opened. The deal was talked at a coupon of 2.125% to 2.625% and an initial conversion premium of 47.5% to 52.5%.
There is an over-allotment option for a further $150 million.
Credit Suisse and UBS Investment Bank were the bookrunners of the registered offering.
The convertibles are non-callable for the first 10 years. They may be put in years 10, 15, 20 and 25.
There will be a contingent conversion trigger at 125% of the conversion price. There will be contingent payment of an additional 50 basis points subject to a trigger at 120% of the principal.
The convertibles have dividend and takeover protection.
There is a cash settlement feature.
Chesapeake, an Oklahoma City-based oil and gas exploration and production company, said it will use the proceeds of the deal to repay outstanding revolving debt that bears interest at an average of 6.7%.
| Issuer: | Chesapeake Energy Corp.
|
| Issue: | Convertible senior notes
|
| Bookrunners: | Credit Suisse and UBS Investment Bank
|
| Amount: | $1 billion
|
| Greenshoe: | $150 million
|
| Maturity: | May 15, 2037
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 50%
|
| Conversion price: | $51.585
|
| Conversion ratio: | 19.3855
|
| Contingent conversion: | 125%
|
| Contingent payment: | 120%
|
| Cash settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before May 15, 2017
|
| Puts: | May 15, 2017; May 15, 2022; May 15, 2027; May 15, 2032
|
| Price talk: | 2.125%-2.625%, up 47.5%-52.5%
|
| Pricing date: | May 10, before the open
|
| Settlement date: | May 15
|
| Distribution: | Registered
|
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