Summary
Chesapeake Energy Corporation (EXE) announced on June 12, 2014, the pricing of $500 million in aggregate principal amount of 6.5% senior notes due 2022. These notes will be issued by its indirect wholly-owned subsidiary, Chesapeake Oilfield Operating, L.L.C., which is slated to be renamed Seventy Seven Energy Inc. This issuance is part of a private placement conducted under Rule 144A and Regulation S. The key takeaway for investors is that this debt issuance is directly tied to the previously announced spin-off of Chesapeake Oilfield Operating, L.L.C. The renaming to Seventy Seven Energy Inc. and the subsequent spin-off are significant corporate actions that will create a separate, publicly traded entity. Investors should monitor the details of this spin-off as it will impact the structure and future prospects of both Chesapeake Energy and the newly formed Seventy Seven Energy.
Key Highlights
- 1Chesapeake Energy Corporation (EXE) priced $500 million of 6.5% senior notes due 2022.
- 2The notes will be issued by an indirect wholly-owned subsidiary, Chesapeake Oilfield Operating, L.L.C.
- 3The subsidiary will be renamed Seventy Seven Energy Inc. in connection with its spin-off from Chesapeake Energy.
- 4The offering was conducted as a private placement under Rule 144A and Regulation S.
- 5This debt issuance is a precursor to the planned spin-off of Seventy Seven Energy Inc.
- 6The event date for the pricing was June 12, 2014.