Published on 4/10/2014 in the Prospect News High Yield Daily.
New Issue: Chesapeake Energy prices restructured $3 billion two-part deal
By Paul A. Harris
Portland, Ore., April 10 - Chesapeake Energy Corp. priced $3 billion of senior notes (Ba3/BB-) in two tranches on Thursday, according to syndicate sources.
The quick-to-market deal was restructured from the offering announced Thursday morning.
In its final shape, the transaction included a $1.5 billion tranche of Libor plus 325 basis points five-year floating-rate notes which priced at par to yield Libor plus 325 bps.
The spread printed on top of spread talk. The reoffer price came rich to the 99.5 price talk.
Morgan Stanley & Co. will bill and deliver for this tranche. Citigroup Global Markets was a joint bookrunner.
Chesapeake Energy also priced $1.5 billion of eight-year fixed-rate notes at par to yield 4 7/8%.
The yield printed in the middle of the 4¾% to 5% yield talk.
For the 2022 notes, joint bookrunner Citigroup will bill and deliver. Morgan Stanley, Credit Agricole CIB, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mitsubishi UFJ were also joint bookrunners.
A proposed tranche of non-callable 12-year senior fixed-rate notes was withdrawn.
The Oklahoma City-based oil and gas company plans to use the proceeds from the public offer to purchase its 2015 notes in a concurrent tender offer, as well as to redeem its 2018 notes and to repay its 2012 term loan in full, with any remaining proceeds to be used for general corporate purposes including the purchase, repayment or redemption of debt.
| Issuer: | Chesapeake Energy Corp.
|
| Amount: | $3 billion
|
| Securities: | Senior notes
|
| Trade date: | April 10
|
| Settlement date: | April 24
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-
|
| Distribution: | SEC registered
|
| Marketing: | Quick to market
|
|
|
| Floating-rate notes
|
| Amount: | $1.5 billion
|
| Maturity: | April 15, 2019
|
| Joint bookrunners: | Morgan Stanley & Co. (bill and deliver), Citigroup Global Markets
|
| Coupon: | Libor plus 325 bps
|
| Price: | Par
|
| Yield: | Libor plus 325 bps
|
| First call: | April 15, 2015 at 101
|
| Price talk: | Libor plus 325 bps at 99.5
|
|
|
| Fixed-rate notes
|
| Amount: | $1.5 billion
|
| Maturity: | April 15, 2022
|
| Bookrunners: | Citigroup (bill and deliver), Morgan Stanley, Credit Agricole CIB, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mitsubishi UFJ
|
| Senior co-managers: | Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Jefferies LLC, RBS Securities Inc., Wells Fargo Securities LLC
|
| Co-managers: | BBVA, BNP Paribas, Comerica Securities, DNB Markets, Macquarie Capital, Mizuho Securities, Natixis Securities, Nomura, PNC Capital Markets, Santander, Scotia Capital, SMBC, SunTrust Robinson Humphrey, TD Securities, UBS Investment Bank
|
| Coupon: | 4 7/8%
|
| Price: | Par
|
| Yield: | 4 7/8%
|
| Spread: | 254 bps
|
| First call: | April 15, 2017 at 103.656
|
| Price talk: | 4¾% to 5%
|
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