Chesapeake Energy increases revolver size, extends maturity

By Sara Rosenberg

New York, May 11 - Chesapeake Energy Corp. amended and restated its revolving credit facility to increase the borrowing base to $600 million, with commitments of $500 million, from $350 million and to extend the maturity to June 30, 2008 from May 2007.

Union Bank of California is administrative agent and collateral agent, BNP Paribas and SunTrust Bank are co-syndication agents, Calyon and Comerica Bank are co-documentation agents and Bank of Scotland, Washington Mutual and Bank of America are co-agents, according to a 10-Q filed with the Securities and Exchange Commission on Monday.

The revolver carries an initial interest rate of Libor plus 150 basis points, but can range anywhere from Libor plus 125 to 200 basis points depending on ratings. The initial commitment fee is 30 basis points.

Borrowings under the newly expanded revolver, combined with proceeds from a proposed senior notes offering and cash on hand, will be used to fund the acquisition of the natural gas assets in the Ark-La-Tex region of northern Louisiana through the $425 million acquisition of the equity interests of Houston-based, privately held Greystone Petroleum LLC, according to a company news release. The acquisition is expected to close on June 2.

Chesapeake Energy is an Oklahoma City natural gas producer.

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