Summary
EXPAND ENERGY Corp (EXE) is reporting on an event related to its wholly owned subsidiary, Chesapeake Oilfield Operating, L.L.C. (COO). COO successfully priced and closed a $650 million private placement of senior notes due in 2019. These notes carry an interest rate of 6.625% per annum and are initially guaranteed by COO's existing subsidiaries. This financing event has significant implications as COO and its subsidiaries have been released from prior guarantees and other credit support obligations that benefited Chesapeake Energy Corporation and its other subsidiaries. This includes obligations related to Chesapeake's senior notes, contingent convertible senior notes, and corporate revolving bank credit facility. The reported financial performance of the oilfield services subsidiaries, which represent the assets backing this debt, shows approximately $1.3 billion in assets as of June 30, 2011, with $223 million in revenue but a net loss of $4 million for the six months ended June 30, 2011.
Key Highlights
- 1Chesapeake Oilfield Operating, L.L.C. (COO), a subsidiary of EXPAND ENERGY Corp (EXE), successfully closed a $650 million private placement of senior notes.
- 2The newly issued notes mature in 2019 and have a coupon rate of 6.625% per annum.
- 3This debt issuance releases COO and its subsidiaries from previous guarantees and credit support for Chesapeake Energy Corporation's other debt facilities.
- 4The total assets of Chesapeake's oilfield services subsidiaries (COO's assets) were approximately $1.3 billion as of June 30, 2011.
- 5For the first half of 2011, these oilfield services subsidiaries generated $223 million in revenue but incurred a net loss of $4 million.
- 6The transaction was announced via press release on October 25, 2011, and closed on October 28, 2011.