8-KRegulation FDExhibits & Filings

EXPAND ENERGY Corp 8-K Report, Regulation FD Disclosure (Mar 15, 2013)

Filed March 15, 2013For Securities:EXEEXEELEXEEWEXEEZ

Summary

On March 15, 2013, Chesapeake Energy Corporation (the "Company") announced significant developments regarding its 6.775% Senior Notes due 2019. The Company has initiated a special early redemption of these notes at par value, indicating a move to retire this debt. This action is supported by a notice sent to the Depositary, and the Company is actively pursuing legal confirmation in the U.S. District Court for the Southern District of New York to ensure the redemption is timely and effective at par. While the Court denied the Company's request for a preliminary injunction to compel the acceptance of the redemption notice, the Company views the court's preliminary statements as providing comparable relief. These statements suggest that if the notice is ultimately deemed untimely for a par redemption, it will not trigger a redemption at the higher "make-whole" price but will instead be considered ineffective for any redemption. This outcome is favorable for the Company as it aims to redeem the notes at par, avoiding a potentially more costly "make-whole" provision.

Key Highlights

  • 1Chesapeake Energy Corp. initiated a special early redemption of its 6.775% Senior Notes due 2019 at par.
  • 2The Company has notified the Depositary of its intent to redeem the notes.
  • 3Chesapeake is pursuing legal action to confirm the timely and effective redemption of the notes at par.
  • 4The U.S. District Court for the Southern District of New York is involved in the confirmation process.
  • 5A request for a preliminary injunction to compel acceptance of the redemption notice was denied by the Court.
  • 6The Company obtained preliminary statements from the Court that it believes offer comparable relief, avoiding a "make-whole" redemption if the notice is found untimely for par redemption.
  • 7The Company aims to redeem the notes at par, avoiding the potentially higher 'make-whole' redemption price.

Frequently Asked Questions

Chesapeake Energy Corp. has initiated a special early redemption of its 6.775% Senior Notes due 2019 at par value.

The lawsuit is intended to seek confirmation from the U.S. District Court for the Southern District of New York that the notice to redeem the notes at par will be timely and effective. This legal action aims to solidify the redemption at the intended price.

The Court denied Chesapeake's request for a preliminary injunction regarding The Bank of New York Mellon Trust Company's obligation to accept the redemption notice at par. However, the Company received preliminary statements that it believes provide comparable relief, preventing a "make-whole" redemption if the notice is deemed untimely for par redemption.

The 'make-whole' price refers to a provision in some debt agreements that requires the issuer to pay bondholders an amount that compensates them for the loss of future interest payments if the debt is redeemed early. This amount is typically higher than the par value and is designed to make the investor whole for the early redemption.