By Paul A. Harris
St. Louis, June 27 - Chesapeake Energy Corp. priced a $500 million issue of 7 5/8% seven-year notes (Ba2/BB) at 98.266 to yield 7.95% on Tuesday, according to a syndicate source.
The yield came 7.5 basis points beyond the wide end of the 7¾% area price talk.
Banc of America Securities LLC, Deutsche Bank Securities, Goldman Sachs, Lehman Brothers, Wachovia Securities were joint bookrunners for the off-the-shelf deal. ABN Amro, BNP Paribas, Calyon Securities, Fortis Securities, RBS Greenwich Capital Markets, SunTrust Robinson Humphrey and Well Fargo Securities were the senior co-managers. Barclays Capital, Harris Nesbitt, BancOne Capital Markets, Comerica, DZ Bank, HVB, Piper Jaffray, TD Securities and Wedbush Morgan were the co-managers.
Proceeds, along with a $500 million offering of convertible preferred shares and 20 million common shares (about $600 million), will be used to fund the $932 million Barnett Shale acquisitions, to repay the company's revolver and for general corporate purposes.
The issuer is an Oklahoma City-based independent producer of natural gas.
| Issuer: | Chesapeake Energy Corp.
|
| Amount: | $500 million
|
| Maturity: | July 15, 2013
|
| Security description: | Senior notes
|
| Bookrunners: | Banc of America Securities LLC, Deutsche Bank Securities, Goldman Sachs, Lehman Brothers, Wachovia Securities
|
| Coupon: | 7 5/8%
|
| Price: | 98.266
|
| Yield: | 7.95%
|
| Spread: | 275 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps
|
| Trade date: | June 27
|
| Settlement date: | June 30
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB
|
| Distribution: | SEC Registered
|
| Price talk: | 7¾% area
|
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