Chesapeake Energy Corp. (CHK) announced it has entered into a $3.0 billion unsecured loan from Goldman Sachs Bank USA and affiliates of Jefferies Group, Inc.
Chesapeake Energy stated that the net proceeds of the loan, after payment of customary fees and original issue discount (if any), will be utilized to repay borrowings under the company's existing corporate revolving credit facility.
The new facility, which ranks pari passu to Chesapeake's outstanding senior notes, matures on December 2, 2017 and may be repaid at any time this year without penalty at par value and carries an initial variable annual interest rate through December 31, 2012 of LIBOR plus 7.0%, which is currently 8.5%, given the 1.5% LIBOR floor in the loan agreement.
Chesapeake, said during the remainder of the year, it plans to complete asset sales totaling $9.0 billion -$11.5 billion and intends to use a portion of the proceeds from these asset sales to repay the loan.
Chesapeake has received strong interest from prospective buyers of its Permian Basin asset sales process and its Mississippi Lime joint venture process, and the company expects to complete these two transactions in the 2012 third quarter.
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