Chesapeake Energy launches tender offers for 7%, 6 5/8%, 6¼% notes

By Angela McDaniels

Tacoma, Wash., Aug. 3 - Chesapeake Energy Corp. began tenders offers and a consent solicitation for its $300 million of 7% senior notes due 2014, $600 million of 6 5/8% senior notes due 2016 and $600 million of 6¼% senior notes due 2018, according to a company news release.

The company is soliciting consents to the adoption of some proposed amendments to each of the indentures governing the notes to, among other things, eliminate substantially all of the restrictive covenants, some events of default and other related provisions.

For each $1,000 principal amount, the company is offering $1,026.50 for the 7% notes, $1,036.25 for the 6 5/8% notes and $1,034.00 for the 6¼% notes.

These amounts include a consent payment of $25.00 for each note tendered by 5 p.m. ET on Aug. 16, the consent time.

The company will also pay accrued interest up to but excluding the applicable settlement date.

Each tender offer will expire at midnight ET on Aug. 30.

If any notes are tendered by the consent time, the company expects to accept these for purchase and settle them promptly following the consent time.

The consummation of a tender offer is conditioned on the receipt of consents from holders of at least a majority of that series of notes by the consent time.

In addition, Chesapeake's obligation to purchase notes under the tender offers is conditioned on the receipt of at least $1.6 billion of proceeds from a public offering of one or more series of new senior notes, the proceeds of which, along with cash on hand, will be used to fund the tender offers.

Chesapeake currently plans to call for redemption any notes that remain outstanding following the tender offers, although it is not obligated to do so.

The dealer manager and solicitation agent is Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-5912). The information agent and depositary is Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 952-2200).

Chesapeake Energy produces natural gas and is based in Oklahoma City.

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