OKLAHOMA CITY, Dec. 20, 2019 /PRNewswire/ -- Chesapeake Energy
Corporation (NYSE: CHK) ("Chesapeake" or the "Company") today
announced the preliminary results to date of its pending tender
offer, on behalf of Brazos Valley Longhorn, L.L.C. ("BVL") and
Brazos Valley Longhorn Finance Corp. (together with BVL, the
"Issuers"), each wholly owned subsidiaries of Chesapeake (the
"Tender Offer"), to purchase for cash any and all of the
outstanding 6.875% Senior Notes due 2025 (the "Notes") issued by
the Issuers and its simultaneous solicitation of consents (the
"Consent Solicitation") with respect to certain proposed amendments
to the indenture governing the Notes. As of the early tender date
of 5:00 p.m., New York City time, on December 19, 2019 (the "Early Tender Date"),
approximately $616.2 million
aggregate principal amount, or approximately 99.74%, of the Notes
were validly tendered and related consents validly delivered. As a
result, Chesapeake announced that the Requisite Consents (as
defined in the Offer to Purchase and Consent Solicitation
Statement, dated December 4, 2019
(the "Offer to Purchase")) had been obtained. Chesapeake also
announced that (1) the Financing Condition (as defined in the Offer
to Purchase) had been satisfied and (2) it has elected to have an
early settlement date of December 23,
2019 for Notes tendered at or prior to the Early Tender Date
(the "Early Settlement Date").
On December 19, 2019, Chesapeake
and U.S. Bank National Association, as trustee (the "Trustee")
under the indenture governing the Notes (the "Existing Indenture"),
entered into a supplemental indenture (the "Supplemental
Indenture") containing the proposed amendments to 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 (the "Proposed
Amendments"). Pursuant to the terms of the Supplemental Indenture,
the Proposed Amendments will become operative on the Early
Settlement Date; provided that Chesapeake purchases in the Tender
Offer at least a majority in aggregate principal amount of the
outstanding Notes on the Early Settlement 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, 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.
All terms and conditions of the Tender Offer remain as set forth
in the Offer to Purchase, the related Letter of Transmittal and
Consent (the "Letter of Transmittal"), and the Company's press
release issued December 10, 2019.
Upon early settlement, each holder who validly tendered their
Notes prior to the Early Tender Date will receive the total
consideration of $1,000 per
$1,000 principal amount of Notes
tendered, which includes $950.00 as
the tender offer consideration and $50.00 as the early tender premium. In addition,
Chesapeake will pay in cash accrued and unpaid interest on the
Notes accepted for purchase in the Tender Offer from the latest
interest payment date to, but not including, the Early Settlement
Date.
The Tender Offer and Consent Solicitation will expire at
11:59 p.m., New York City time, on January 6, 2020, or any other date and time to
which Chesapeake extends the Tender Offer and Consent Solicitation
(such date and time, as it may be extended, the "Expiration Date"),
unless earlier terminated. No tenders of Notes and deliveries
of related consents will be valid if submitted after the Expiration
Date. In addition, after the Withdrawal Deadline of
5:00 p.m., New York City time, on December 19, 2019 (the "Withdrawal Deadline"),
any Notes validly tendered (whether prior to, at or after the
Withdrawal Deadline) may no longer be withdrawn, and related
Consents may no longer be revoked, unless Chesapeake is required to
extend withdrawal or revocation rights under applicable law.
Promptly following the Expiration Date, Chesapeake will accept
for purchase any Notes that have been validly tendered (with
Consents that have been validly delivered) after the Early Tender
Date but at or prior to the Expiration Date, subject to all
conditions to the Tender Offer and Consent Solicitation having been
either satisfied or, in certain circumstances, waived by Chesapeake
at or prior to the Expiration Date (the date of such acceptance and
purchase, the "Final Settlement Date"). Upon the Final Settlement
Date, each holder who validly tendered their Notes after the Early
Tender Date but at or prior to the Expiration Date will receive the
total consideration of $950 per
$1,000 principal amount of Notes
tendered, which does not include the early tender premium.
J.P. Morgan Securities LLC is acting as the dealer manager and
solicitation agent in the Tender Offer and Consent
Solicitation. Global Bondholder Services Corporation has been
retained to serve as both the depositary and the information agent
for the Tender Offer and Consent Solicitation. Persons with
questions regarding the Tender Offer and Consent Solicitation
should contact J.P. Morgan Securities LLC at (212) 834-3424
(collect) or (866) 834-4666 (toll-free). Requests for copies
of the Offer to Purchase, the related Letter of Transmittal and
other related materials should be directed to Global Bondholder
Services Corporation at (toll-free) (866) 470-4300 or (collect)
(212) 430-3774.
None of Chesapeake, the Issuers, their respective boards of
directors or managers, as applicable, or officers, the dealer
manager and solicitation agent, the depositary and information
agent, the Trustee or any affiliate of any of them makes any
recommendation as to whether any holder should tender or refrain
from tendering all or any portion of the principal amount of such
holder's Notes for purchase in the Tender Offer and deliver the
related consents in the Consent Solicitation. No one has been
authorized by any of them to make such a
recommendation. Holders must make their own decision as to
whether to participate in the Tender Offer and Consent Solicitation
and, if so, the amount of Notes as to which action is to be
taken. The Tender Offer and Consent Solicitation are made only
by the Offer to Purchase and related Letter of
Transmittal. This press release is neither an offer to
purchase nor a solicitation of an offer to sell any Notes in the
Tender Offer. The Tender Offer and Consent Solicitation are
not being made to holders in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In
any jurisdiction in which the Tender Offer and Consent Solicitation
are required to be made by a licensed broker or dealer, the Tender
Offer and Consent Solicitation will be deemed to be made on behalf
of Chesapeake by the dealer manager or one or more registered
brokers or dealers that are licensed under the laws of such
jurisdiction.
Headquartered in Oklahoma City, Chesapeake Energy
Corporation's (NYSE: CHK) operations are focused on discovering and
developing its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the
United States.
This news release includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including the
timing of the settlement, the results of the proposed Tender Offer
and Consent Solicitation and the expectation that the term loan
will be funded on the Early Settlement Date. Forward-looking
statements are statements other than statements of historical fact.
Although we believe the expectations and forecasts reflected in the
forward-looking statements are reasonable, we can give no assurance
they will prove to have been correct. They can be affected by
inaccurate or changed assumptions or by known or unknown risks and
uncertainties. Factors that could cause actual results to
differ materially from expected results include our ability to
comply with the covenants under our revolving credit facilities and
other indebtedness and the related impact on our ability to
continue as a going concern, the volatility of oil, natural gas and
NGL prices and other factors described under "Risk Factors" in Item
1A of our annual report on Form 10-K and any updates to those
factors set forth in Chesapeake's subsequent quarterly reports on
Form 10-Q or current reports on Form 8-K.
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SOURCE Chesapeake Energy Corporation