Chesapeake Energy draws down nearly $1 billion for Marcellus purchase

Chicago, March 9 – Chesapeake Energy Corp. drew $914 million in borrowings on the company’s existing credit agreement from Feb. 9, 2021 to help fund the $2 billion cash portion of the purchase price for certain entities that own high-quality producing assets and a deep inventory of premium drilling locations in the prolific Marcellus Shale in northeast Pennsylvania, according to an 8-K filing with the Securities and Exchange Commission.

The other part of the acquisition was funded with $650 million of Chesapeake’s common stock.

The credit facility had an initial borrowing base of $2.5 billion.

The company initially elected commitments under the credit facility as $1.75 billion of revolving tranche A loans and $221 million of fully funded tranche B loans.

Interest on the facility ranges from Libor plus 325 basis points to 425 bps, subject to a 1% Libor floor.

The tranche A loans mature Feb. 9, 2024, and the tranche B loans mature four years from the effective date.

The tranche B loans can be repaid if no tranche A loans are outstanding.

The credit facility dates to the company’s emergence from bankruptcy.

Chesapeake is an Oklahoma City-based oil and natural gas company.

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