The Oklahoma City, OK-based company plans to repurchase up to $500 million in senior notes due 2017-2023 and $500 million in convertible senior notes due 2037/2038. Net proceeds are expected to be used to retire upcoming maturities on unsecured notes.
The deal, which should improve liquidity in the short-term is not unexpected, however, the Chesapeake’s “declining production trajectory, expected ’17 outspend and elevated leverage remain less-than-appealing to us. We remain unenthusiastic on the stock until CHK's fundamental issues on the midstream/transportation front are addressed,” Seaport Global Securities analysts said in a note Monday morning.
Last week, in another move to improve its operational and financial standing, Chesapeake announced plans to exit the Barnett, shedding future liabilities.
Goldman, Sachs & Co. is acting as the dealer manager in the Tender Offers. Global Bondholder Services Corp. has been retained to serve as both the depositary and the information agent for the Tender Offers.