8-KMaterial AgreementsFinancial Events

EXPAND ENERGY Corp 8-K Report, Material Agreement (Feb 3, 2006)

Filed February 3, 2006For Securities:EXEEXEELEXEEWEXEEZ

Summary

Chesapeake Energy Corporation (EXE) filed an 8-K on February 3, 2006, reporting the completion of a private placement offering of an additional $500 million in its existing 6.5% Senior Notes due 2017. These notes mature on August 15, 2017, with semi-annual interest payments on February 15 and August 15, starting February 15, 2006. The offering is governed by an indenture dated August 16, 2005, and the notes are senior unsecured obligations of the company, guaranteed by its existing and future guarantor subsidiaries. While ranking equally with other unsecured senior debt, they are effectively subordinated to secured debt and debt of non-guarantor subsidiaries. The filing also details various events of default, including cross-defaults on other indebtedness exceeding $50 million, and outlines the company's obligations under a registration rights agreement to allow for the exchange of these privately placed notes for publicly registered notes.

Key Highlights

  • 1Chesapeake Energy Corp. completed a $500 million private placement of 6.5% Senior Notes due 2017.
  • 2The notes mature on August 15, 2017, with interest paid semi-annually.
  • 3The offering is governed by an indenture dated August 16, 2005.
  • 4The notes are senior unsecured obligations, guaranteed by subsidiary guarantors.
  • 5The notes are effectively subordinated to secured debt and debt of non-guarantor subsidiaries.
  • 6The filing details specific events of default, including cross-default provisions on indebtedness of $50 million or more.
  • 7A registration rights agreement is in place to facilitate the exchange of these notes for registered notes.

Frequently Asked Questions

This 8-K filing announces the completion of a private placement offering by Chesapeake Energy Corporation of an additional $500 million in its 6.5% Senior Notes due 2017, and details the terms and conditions of these notes.

The 6.5% Senior Notes due 2017 have a maturity date of August 15, 2017, and bear a fixed interest rate of 6.5% per annum, payable semi-annually.

These notes are senior unsecured obligations of Chesapeake Energy Corporation and are guaranteed on a senior unsecured basis by its existing and future guarantor subsidiaries. They rank equally with other unsecured senior debt but are effectively subordinated to any secured debt of the company and its subsidiaries.

Key events of default include failure to pay principal or interest on the notes, default on other indebtedness exceeding $50 million that results in acceleration or a payment default, breaches of merger covenants, and certain bankruptcy or insolvency events.

The Registration Rights Agreement obligates Chesapeake Energy to file a registration statement with the SEC to allow holders of these privately placed notes to exchange them for publicly registered notes of identical terms. This aims to provide liquidity for investors by making the notes freely tradable.