Summary
Chesapeake Energy Corporation (NYSE: CHK) announced on February 28, 2003, the pricing of a $300 million private offering of senior notes due 2013. These notes carry a coupon rate of 7.5% and were priced at 99.102% of par, yielding 7.625%. The offering is being conducted under Rule 144A, meaning it is eligible for trading among qualified institutional buyers and is not registered with the SEC. The primary intended use of the net proceeds from this offering is to partially finance two significant pending acquisitions of Mid-Continent natural gas properties from El Paso Corporation and Vintage Petroleum, Inc. These acquisitions are expected to close in March 2003. Any remaining proceeds will be used to reduce outstanding debt under the company's revolving bank credit facility. In the event the acquisitions do not close, the funds will be allocated for general corporate purposes, including potential future acquisitions. The closing of the notes offering is anticipated for March 5, 2003.
Key Highlights
- 1Chesapeake Energy priced a $300 million offering of 7.5% senior notes due September 15, 2013.
- 2The notes were issued at a discount, priced at 99.102% of par, resulting in a yield of 7.625%.
- 3The offering is a private placement, eligible for trading under Rule 144A, and not registered under the Securities Act of 1933.
- 4Proceeds are primarily earmarked to partially fund pending acquisitions of Mid-Continent natural gas properties from El Paso Corporation and Vintage Petroleum, Inc.
- 5The acquisitions are slated to close in March 2003.
- 6Remaining proceeds will be used to pay down the company's revolving bank credit facility.
- 7If acquisitions are not consummated, proceeds will be used for general corporate purposes, including other potential acquisitions.