Summary
Chesapeake Energy Corporation (CHK) filed an 8-K on May 14, 2012, reporting the execution of a new $3.0 billion Term Loan Credit Agreement on May 11, 2012. This new facility was used to repay outstanding debt under the company's corporate revolving credit facility. The term loan is guaranteed by certain wholly-owned domestic subsidiaries but is not secured by any company assets. The agreement includes standard negative covenants, with some more restrictive modifications compared to the revolving credit facility, particularly concerning unsecured debt, dividends, and unrestricted subsidiaries. Notably, it does not contain financial maintenance covenants.
Key Highlights
- 1Entered into a $3.0 billion Term Loan Credit Agreement on May 11, 2012.
- 2Proceeds were used to repay existing debt under the corporate revolving credit facility.
- 3The loan is guaranteed by certain domestic subsidiaries but is unsecured.
- 4Includes restrictive covenants regarding debt incurrence, liens, investments, and dividends.
- 5Maturity date for the term loan is December 2, 2017.
- 6Lenders have an option to exchange loans for fixed rate notes (11.50% interest) starting May 11, 2013.
- 7Repayment of the term loan may involve yield maintenance premiums after January 1, 2013.