Chesapeake ups exchange amount for five note series to $2.21 billion

By Marisa Wong

Los Angeles, Dec. 18 – Chesapeake Energy Corp. said it increased the maximum exchange amount under its previously announced private offers of new 11½% senior secured second-lien notes due 2025 in exchange for five series of its outstanding senior notes.

Chesapeake is now offering to issue $2,210,156,000 of new second-lien notes for the existing notes, up from $1.5 billion.

As of 5 p.m. ET on Dec. 17, the early tender date, holders had tendered about $3.22 billion, or 71.4%, of the existing notes, according to a Wednesday press release.

The exchange offers are conditioned on sufficient existing notes being tendered so that at least $1.5 billion of new second-lien notes will be issued; this condition has now been met.

The company will accept all of the early tendered notes for exchange on Dec. 19.

As of the early tender time, holders had tendered the following notes, listed in order of acceptance priority level and with the total consideration per $1,000 principal amount:

• $837,253,000 of the $1.09 billion of outstanding 8% senior notes due 2027 for $700 of new notes;

• $872,653,000 of the $918,514,000 of outstanding 8% senior notes due 2026 for $700 of new notes;

• $998,526,000 of the $1,244,498,000 of outstanding 8% senior notes due 2025 for $700 of new notes;

• $281,063,000 of the $400 million of outstanding 7½% senior notes due 2026 for $620 of new notes; and

• $226,405,000 of the $850 million of outstanding 7% senior notes due 2024 for $620 of new notes.

The total consideration includes an early tender premium of $50.00 per $1,000 principal amount tendered by the early tender deadline.

Holders will also receive accrued interest.

All existing notes that were tendered for exchange at or prior to the early tender date have priority over any existing notes that are tendered for exchange after the early tender date, even if the existing notes tendered after the early tender date have a higher acceptance priority level.

The exchange offers will expire at 11:59 p.m. ET on Jan. 2. However, because the exchange offer cap has already been met, no existing notes tendered after the early settlement date will be accepted.

Tenders may no longer be withdrawn.

As previously announced, the exchange offers are being made in connection with a concurrent secured term loan financing and a concurrent cash tender offer and consent solicitation for its 6 7/8% senior notes due 2025 issued by Brazos Valley Longhorn, LLC and Brazos Valley Longhorn Finance Corp. The exchange offers are not conditioned upon the completion of the concurrent transactions.

Global Bondholder Services Corp. (866 470-4300 or 212 430-3774 for banks and brokers) is the information agent and depositary for the exchange offers.

The natural gas producer is based in Oklahoma City.

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