Published on 9/25/2018 in the Prospect News High Yield Daily.
New Issue: Chesapeake Energy prices $1.25 billion senior notes in two tranches
By Paul A. Harris
Portland, Ore., Sept. 25 – Chesapeake Energy Corp. priced $1.25 billion of senior notes (Caa1/B-) in two tranches late Tuesday afternoon, according to market sources.
An $850 million tranche of six-year notes priced at par to yield 7%, at the tight end of the 7% to 7¼% yield talk. Initial talk was in the context of 7% to 7¼%.
A $400 million tranche of eight-year notes priced at par to yield 7½%, in the middle of price talk in the 7½% area. Initial talk was in the context of 7¼% to 7½%.
Goldman Sachs & Co. LLC was the left bookrunner for the public offering. J.P. Morgan Securities LLC, Wells Fargo Securities LLC and MUFG were the joint bookrunners.
The Oklahoma City-based oil and gas company plans to use the proceeds, together with cash on hand and borrowings under its credit facility, if necessary, to repay term loan debt, with any excess proceeds to be used for general corporate purposes, which may include debt repayment, including its second-lien notes.
| Issuer: | Chesapeake Energy Corp.
|
| Amount: | $1.25 billion
|
| Securities: | Senior notes
|
| Left bookrunner: | Goldman Sachs & Co. LLC
|
| Joint bookrunners: | J.P. Morgan Securities LLC, Wells Fargo Securities LLC, MUFG
|
| Senior co-managers: | ABN Amro, BMO Capital Markets, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Agricole CIB, DNB Markets, Mizuho Securities, Morgan Stanley & Co. LLC, Natixis, RBC Capital Markets LLC
|
| Trade date: | Sept. 25
|
| Settlement date: | Sept. 27
|
| Ratings: | Moody's: Caa1
|
| S&P: B-
|
| Distribution: | SEC registered
|
| Marketing: | Quick to market
|
|
|
| Six-year notes
|
| Amount: | $850 million
|
| Maturity: | Oct. 1, 2024
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Spread: | 396 bps
|
| Call protection: | 2.5 years
|
| Price talk: | 7% to 7¼%
|
|
|
| Eight-year notes
|
| Amount: | $400 million
|
| Maturity: | Oct. 1, 2026
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 441 bps
|
| Call protection: | Three years
|
| Price talk: | 7 ½% area
|
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