Chesapeake Energy talks $750 million eight-year notes 8¼% area yield, including 1.5 points OID

By Paul A. Harris

Portland, Ore., Dec. 6 – Chesapeake Energy Corp. talked its $750 million offering of eight-year senior notes to yield in the 8¼% area, including 1.5 points of original issue discount, a trader said on Tuesday afternoon.

Initial guidance had the deal pricing with a yield in the mid-8% context.

The deal was scheduled to be shopped on a Tuesday morning conference call with investors and was expected to price later on Tuesday. However no terms were available at press time, according to market sources.

Deutsche Bank Securities Inc. is leading the sale.

The notes come with three years of call protection.

The Oklahoma City-based oil and gas producer plans to use the proceeds, together with cash on hand and borrowings under its revolving credit facility, to finance tender offers for certain of its senior notes announced Tuesday.

If the tender offers are not consummated or the proceeds from the new notes offer exceed the total consideration payable from the tender, Chesapeake intends to use the remaining proceeds for general corporate purposes, which may include debt repurchases and the repayment of its senior notes with near-term maturities as they become due.

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