Chesapeake Energy bringing drive-by offering of $250 million 10-year notes

By Paul A. Harris

St. Louis, Mo., Aug. 5 - Chesapeake Energy Corp. plans to price $250 million of senior notes due 2012 (B1 expected/B+) late Tuesday afternoon or early Wednesday, according to a syndicate source.

Salomon Smith Barney and Lehman Brothers are joint bookrunners. Bear Stearns & Co., Credit Swiss First Boston and Morgan Stanley are co-managers.

The Rule 144A notes are non-callable for five years.

Proceeds will be used to fund three pending acquisitions totaling $132 million, to repay bank debt recently incurred to purchase $43 million of senior notes due in 2004, to purchase $38 million of natural gas properties in Oklahoma from The Williams Cos. and for general corporate purposes, including the funding of future acquisitions.

The issuer is an Oklahoma City, Okla.-based oil and gas exploration and production company.

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