Chesapeake plans to sell $1 billion in notes to raise money

With nearly $10 billion in debt, Oklahoma City’s Chesapeake Energy Corporation is considering a move to raise more funds through a proposed more than one billion dollar sale of senior notes.

In a preliminary prospectus  filing with the Securities and Exchange Commission this week, the company proposed a sale of $1,250,000,000 in senior notes due 2024 and 2026. But it didn’t indicate any of the principal amounts of each of the notes. The filing did not also reflect the percentage rates.

“We intend to use the net proceeds from this offering, together with cash on hand and borrowings under our revolving credit facility, if necessary, to repay borrowings under our outstanding term loan, as described under “Use of Proceeds”, ” stated the filing.

“The notes will be guaranteed on a senior, unsecured basis by all of our subsidiaries that guarantee our revolving credit facility, secured term loan, senior secured second lien notes and certain other senior notes. In the future, the guarantees may be released and terminated under certain circumstances,” added the company filing.

In the filing, Chesapeake also warned that it and its subsidiaries might incur “substantially more debt in the future subject to the restrictions contained in our Credit Facility, our Term Loan and the indentures governing the notes and our other senior notes, some of which may be secured debt.”

The filing showed Chesapeake’s total consolidated indebtedness as of June 30, 2018 totaled $9.7 billion and $6.5 billion was unsecured. Only $3.2 billion was secured indebtedness.

Click here to see SEC filing.