Chesapeake Energy to raise $5 billion in two years for debt repayment

By Lisa Kerner

Charlotte, N.C., May 10 - Chesapeake Energy Corp. said it plans to raise up to $5 billion in the next 24 months to repay up to $3.5 billion of senior debt and increase its investments in liquids-rich plays by up to $1.5 billion.

On Monday, Chesapeake announced a $600 million private placement of 5.75% cumulative non-voting convertible preferred stock.

Within the next three to 12 months, the company is planning to sell up to a 20% equity interest in its subsidiary, Chesapeake Appalachia, LLC, to private and/or public investors, according to a Chesapeake news release.

Chesapeake said over the next 24 months it anticipates repaying up to an additional $2.9 billion of senior notes with proceeds from the potential placement of up to $500 million of additional preferreds to investors in Asia, potential joint ventures and/or other asset monetizations.

The actions are part of a plan to "to increase shareholder value, reduce debt and ultimately achieve an investment grade rating for the company's debt securities," Chesapeake said in the news release.

Chesapeake Energy is an Oklahoma City-based independent producer of natural gas.

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