By Kenneth Lim
Boston, May 20 - Chesapeake Energy Corp. priced a substantially upsized $1.2 billion offering of 30-year convertible senior notes on Tuesday at the middle of talk to yield 2.25% with an initial conversion premium of 50%.
The notes were offered at par. Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 47.5% to 52.5%.
The size of the deal was originally $500 million with an over-allotment option for an additional $75 million. The greenshoe is now for an additional $180 million.
Banc of America Securities LLC, Barclays Capital, Credit Suisse, Goldman, Sachs & Co. and UBS Investment Bank are the bookrunners of the registered shelf offering.
Concurrent with the convertible deal, Chesapeake also issued $800 million of 10-year senior notes at a coupon of 7.25%.
The convertibles have a contingent conversion hurdle at 125% of the conversion price.
There will be contingent payment of 0.5% per year of the average trading price subject to a threshold at 120% of the principal.
The convertibles are non-callable for the first 10 years. They may be put in years 10, 15, 20 and 25.
The notes may be net-share settled and will have dividend and takeover protection.
Chesapeake, an Oklahoma City-based oil and natural gas producer, said it will use the proceeds to redeem its 7.75% senior notes due 2015, to temporarily repay a revolving bank loan and for general corporate purposes.
| Issuer: | Chesapeake Energy Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $1.2 billion, increased from $500 million
|
| Greenshoe: | $180 million, increased from $75 million
|
| Maturity: | Dec. 15, 2038
|
| Bookrunners: | Banc of America Securities LLC, Barclays Capital, Credit Suisse, Goldman, Sachs & Co. and UBS Investment Bank
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 50%
|
| Conversion price: | $85.89
|
| Conversion ratio: | 11.6428
|
| Contingent conversion: | 125%
|
| Contingent payment: | 120%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Dec. 15, 2018
|
| Puts: | Dec. 15, 2018; Dec. 15, 2023; Dec. 15, 2028; Dec. 15, 2033
|
| Pricing date: | May 20, after the close
|
| Settlement date: | May 27
|
| Distribution: | Registered
|
| Price talk: | 2%-2.5%, up 47.5%-52.5%
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
