Tender offer
Chesapeake Energy Corporation Announces Increase In Consideration For Cash Tender Offer And Commitments To Tender From Majority Of Holders
OKLAHOMA CITY, Dec. 10, 2019 /
PRNewswire/ -- Chesapeake Energy Corporation (NYSE: CHK) ("Chesapeake" or the "Company") announced today an amendment to its previously announced cash tender offer and consent solicitation (the "Tender Offer"), on behalf of its wholly owned subsidiaries Brazos Valley Longhorn, L.L.C. ("BVL") and Brazos Valley Longhorn Finance Corp. (together with BVL, the "Issuers"), for the 6.875% Senior Notes due 2025 (the "Notes") issued by the Issuers. The Tender Offer, which is subject to certain terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated December 4, 2019 (the "Offer to Purchase"), has been amended to increase the tender offer consideration from $920.00 per $1,000 principal amount of Notes validly tendered and accepted for purchase in the Tender Offer to $950.00 per $1,000 principal amount of Notes validly tendered and accepted for purchase in the Tender Offer. As a result of this increase in the tender offer consideration, the New Total Consideration (defined below), in respect of Notes that are validly tendered at or prior to the Early Tender Date (defined below), is $1,000 per $1,000 principal amount of Notes validly tendered and accepted for purchase in the Tender Offer.
As previously disclosed, concurrently with the Tender Offer, Chesapeake is conducting, on behalf of the Issuers, a simultaneous solicitation of consents (the "Consent Solicitation") from each registered holder (individually, a "Holder" and, collectively, the "Holders") of the Notes with respect to certain proposed amendments (the "Proposed Amendments") to the indenture governing the Notes (the "Existing Indenture"). If Holders of the Notes validly tender their Notes in the Tender Offer, they will be deemed to have validly delivered their related consents, with respect to the principal amount of such tendered Notes, to the Proposed Amendments (the "Consents"). A Holder may not deliver Consents without tendering the related Notes pursuant to the Tender Offer and may not tender Notes without delivering the related Consents pursuant to the Consent Solicitation. The supplemental indenture (the "Supplemental Indenture") containing the Proposed Amendments would amend the Existing Indenture to, among other things, eliminate substantially all of the restrictive covenants, certain events of default and certain other provisions currently applicable to the Notes.
Chesapeake also announced today that Holders representing at least a majority of the outstanding aggregate principal amount of the Notes have committed to tender their Notes and deliver the related Consents in the Tender Offer at or prior to the Early Tender Date. The Company therefore expects that Notes that are not validly tendered pursuant to the Tender Offer for any reason will be bound by the Proposed Amendments and will no longer be entitled to the benefits of substantially all of the restrictive covenants, certain events of default and certain other provisions contained in the Existing Indenture. In addition, under the circumstances described in the Offer to Purchase, including the satisfaction of the financing condition described below, the Notes will no longer be effectively senior to all of the Company's existing and future unsecured senior indebtedness with respect to the assets of the Issuers and their subsidiaries and will be effectively subordinated to claims of holders of the Company's secured indebtedness to the extent of the value of the collateral securing such indebtedness.
Except as provided for in this release, all other terms and conditions of the Tender Offer and Consent Solicitation remain unchanged as set forth in an Offer to Purchase and the related Letter of Transmittal and Consent (the "Letter of Transmittal").
The following table sets forth the amended pricing terms of the Tender Offer.
Series of Notes
CUSIP Number
Aggregate
Principal Amount
Outstanding
New Tender Offer
Consideration(1)
Early Tender
Premium(1)
New Total
Consideration(1)(2)
6.875% Senior Notes due 2025
96812TAB8
$617,810,000
$950.00
$50.00
$1,000.00
