Chesapeake Energy Corporation announced Monday it had a new source of funding for its operations.
The company said the new senior secured reserve-based revolving credit facility replaced its previous credit facility. In a filing with the Securities and Exchange Commission, Chesapeake would be able to obtain an initial borrowing base of $3.5 billion.
As part of the agreement, Chesapeake’s obligations were guaranteed by its subsidiaries as well as oil and gas assets, excluding the Eagle Ford and Brazos Valley assets.
Chesapeake explained it obtained the new revolving credit facility as a result of “a more favorable interest rate grid as well as loosened financial and administrative covenants and administrative burdens.”
“This credit facility reflects our continued progress to strengthen our capital structure and the high confidence that our financial partners hold in our Company,” said Mohit Singh, Chesapeake’s Executive Vice President and Chief Financial Officer. “While we are able to access capital markets today at attractive rates, we know the value of an investment grade rating, and are confident we are on the path to achieving it.”