Chesapeake offers to pay $750 million in tender for five note series

By Susanna Moon

Chicago, May 22 – Chesapeake Energy Corp. said it began cash tender offers for five series of notes with a $750 million purchase price cap, excluding accrued interest.

The issuer’s $2,418,953,000 of 8% senior secured second-lien notes due 2022 will be given priority over the other two series, with a total purchase price of $1,100 for each $1,000 principal amount of notes tendered by 5 p.m. ET on June 5, the early tender date.

For the 8% notes, the total amount includes an early tender premium of $35.00 per $1,000 of notes tendered by the early deadline.

Chesapeake is offering to pay up to $200 million for the priority 2 notes with a purchase price per $1,000 principal amount as follows:

• $572,621,000 of 6 5/8% senior notes due 2020 with a purchase price of $1,045; and

• $278,978,000 of 6 7/8% senior notes due 2020 with a purchase price of $1,047.50.

For the priority 3 notes, the issuer also is offering to pay up to $200 million less the aggregate purchase price of the priority 2 notes.

The purchase price for the priority 3 notes per $1,000 principal amount is as follows:

• $550,327,000 of 6 1/8% senior notes due 2021 with a purchase price of $1,020; and

• $269,907,000 of 5 3/8% senior notes due 2021 with a purchase price of $970.

Holders also will receive accrued interest to but excluding the settlement date.

The tender offers will remain open until 11:59 p.m. ET on June 19.

Tendered notes may be withdrawn before the early deadline.

The offer does not contain a minimum tender condition, but is contingent on Chesapeake obtaining proceeds from a concurrent private offering of senior notes to finance at least $500 million of the purchase price, according to a company announcement.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the depositary and the information agent.

Chesapeake Energy is an Oklahoma City-based oil and gas producer.

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