Summary
On November 7, 2007, Chesapeake Energy Corporation (CHK) filed an 8-K to report the amendment and restatement of its revolving bank credit facility. This amendment significantly increases the borrowing base to $3.5 billion, with $3.0 billion in commitments, and extends the maturity date to November 2, 2012. The facility involves Chesapeake Exploration, L.L.C. and Chesapeake Appalachia, L.L.C. as Co-Borrowers, and is guaranteed by all material domestic subsidiaries. The collateral securing this facility consists of specific oil and gas properties, distinct from those used for hedging purposes. This substantial increase in credit capacity and extended maturity signals management's confidence in future operations and its ability to secure significant funding. Investors should note the defined events of default, which include payment delinquencies, material inaccuracies in representations, covenant breaches, significant defaults on other indebtedness, bankruptcy, and change of control provisions. The detailed terms provide insight into the company's financial flexibility and the conditions under which lenders can take action.
Key Highlights
- 1Revolving credit facility amended and restated to increase borrowing base to $3.5 billion.
- 2Total commitments under the facility are $3.0 billion.
- 3Maturity date extended to November 2, 2012.
- 4Chesapeake Exploration, L.L.C. and Chesapeake Appalachia, L.L.C. are the Co-Borrowers.
- 5The facility is secured by specific oil and gas properties.
- 6Guaranteed by all material domestic subsidiaries.
- 7Detailed events of default are outlined, including significant financial thresholds and change of control triggers.