Chesapeake Energy buys back $599.92 million of 9½% notes, 6½% notes

By Angela McDaniels

Tacoma, Wash., May 16 - Chesapeake Energy Corp. received tenders for $599,917,000 principal amount of notes in its two tender offers that expired at 11:59 p.m. ET on May 13. All of the notes were accepted for purchase.

Holders tendered $160,303,000 of the company's $1,425,000,000 9½% senior notes due 2015 and $439,614,000 of its $1.1 billion 6½% senior notes due 2017, according to a company news release.

For each $1,000 principal amount of notes, the purchase price is $1,210.00 for the 9½% notes and $1,110.00 for the 6½% notes. These prices include an early tender premium of $20.00 for each note tendered by the early tender deadline, which was 5 p.m. ET on April 15.

Holders will also receive accrued interest. The settlement date was expected to be May 16.

When the offers began on April 4, the company was offering to purchase up to $100 million of the 9½% notes and up to $150 million of the 6½% notes. On April 29, it increased the caps to $138,435,000 and $438,961,000, respectively, and reserved the right to further increase the caps.

Other offers

The company also held tender offers for five other series of notes. Those offers ended at 11:59 p.m. ET on April 29.

Chesapeake Energy accepted $393,638,000 of dollar-denominated notes and €255,835,000 of euro-denominated notes for purchase in those offers.

The company offered to buy:

• Up to $100 million of its $500 million 7 5/8% senior notes due 2013 at a price of $1,102.50 per $1,000 principal amount. Holders tendered $35.89 million of these notes, all of which was accepted;

• Up to €253.69 million of its €600 million 6¼% senior notes due 2017 at a price of €1,062.50. Holders tendered €255,835,000 of these notes, all of which was accepted;

• Up to $150 million of its $600 million 6 7/8% senior notes due 2018 at a price of $1,110.00. Holders tendered $126,332,000 of these notes, all of which was accepted;

• Up to $200 million of its $800 million 7¼% senior notes due 2018 at a price of $1,140.00. Holders tendered $131,416,000 of these notes, all of which was accepted; and

• Up to $100 million of its $1.4 billion 6 5/8% senior notes due 2020 at a price of $1,090.00. Holders tendered $531,816,000 of these notes, $100 million of which was accepted.

Each of these prices includes an early tender premium of $20.00 or €20.00 for each note tendered by the early tender deadline, which was 5 p.m. ET on April 15.

Holders also received accrued interest up to but excluding the settlement date, which was May 3 for the 6¼% euro-denominated notes and May 2 for the remaining notes.

Chesapeake also held separate tender offers for up to $1 billion of its contingent convertible senior notes. These offers expired at 11:59 p.m. ET on April 29. Holders tendered $530,894,000 of convertibles.

None of the tender offers were conditioned on the results of the other offers.

Combined with open-market purchases of convertibles, Chesapeake has retired a total of $1,664,449,000 principal amount of dollar-denominated senior notes and convertibles and €255,835,000 principal amount of euro-denominated senior notes in 2011.

The dealer managers were Deutsche Bank Securities Inc. (855 287-1922, 212 250-7527 or 44 0 20 7545 8011), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106 or 44 0 20 7986 8969) and RBS Securities Inc. (877 297-9832, 203 897-6145 or 44 0 20 7085 4634).

Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 470-4200) was the information agent for the dollar-denominated notes, and Lucid Issuer Services Ltd. (+44 0 20 7704 0880 or chesapeake@lucid-is.com) was the information agent for the euro-denominated notes.

Chesapeake produces natural gas and is based in Oklahoma City.

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