8-KOther Events

EXPAND ENERGY Corp 8-K Report (Dec 16, 2003)

Filed December 16, 2003For Securities:EXEEXEELEXEEWEXEEZ

Summary

Chesapeake Energy Corporation (Chesapeake) has announced early results of its exchange offer for its 8.125% Senior Notes due April 1, 2011. The company has received tenders for approximately $377.1 million in aggregate principal amount of the existing notes as of the early participation date. This exchange offer aims to replace older, higher-interest debt with new notes carrying lower interest rates and extended maturity dates. Specifically, $125.2 million of existing notes were exchanged for new 7.75% Senior Notes due 2015, and $251.8 million were exchanged for new 6.875% Senior Notes due 2016. Holders who participated early also received an additional $10.00 in cash per $1,000 principal amount tendered. This move indicates Chesapeake's proactive debt management strategy, seeking to reduce its interest expense and improve its capital structure. The offer remains open until December 29, 2003, with payment expected by December 31, 2003.

Key Highlights

  • 1Chesapeake Energy announced early results for its exchange offer on 8.125% Senior Notes due 2011.
  • 2Approximately $377.1 million in aggregate principal amount of existing notes were tendered by the early participation deadline.
  • 3$125.2 million of old notes were exchanged for new 7.75% Senior Notes due 2015.
  • 4$251.8 million of old notes were exchanged for new 6.875% Senior Notes due 2016.
  • 5Early participants received an additional $10.00 in cash per $1,000 principal amount tendered.
  • 6The exchange offer represents a move to lower interest rates and extend debt maturities.
  • 7The offer is set to expire on December 29, 2003, with payment expected on December 31, 2003.

Frequently Asked Questions

The main purpose of the exchange offer is for Chesapeake Energy to replace its outstanding 8.125% Senior Notes due 2011 with new notes that have lower interest rates (7.75% and 6.875%) and later maturity dates (2015 and 2016). This is a common strategy to reduce interest expense and improve the company's debt profile.

As of the early participation date, Chesapeake Energy has received valid tenders for approximately $377.1 million aggregate principal amount of its 8.125% Senior Notes due 2011.

Chesapeake is issuing two series of new notes: 7.75% Senior Notes due 2015 and 6.875% Senior Notes due 2016. Approximately $125.2 million of old notes were exchanged for the 2015 notes and $251.8 million for the 2016 notes.

The exchange offer will remain open until 12:00 midnight, New York City time, on December 29, 2003, unless extended by Chesapeake Energy. Payment for accepted tenders is expected on December 31, 2003.