Chesapeake Energy prices tender offers for contingent convertibles

By Angela McDaniels

Tacoma, Wash., April 28 - Chesapeake Energy Corp. determined the purchase prices it will pay in the tender offers for three series of its contingent convertible senior notes, according to a company news release.

The company will purchase up to $300 million of its $451,071,000 2.75% contingent convertibles due 2035, up to $350 million of its $1,377,979,000 2.5% contingent convertibles due 2037 and up to $350 million of its $612,118,000 2.25% contingent convertibles due 2038.

For each $1,000 principal amount, the company will pay $1,164.49 for the 2.75% convertibles, $1,095.83 for the 2.5% convertibles and $935.07 for the 2.25% convertibles.

Holders will also receive accrued interest up to but excluding the settlement date.

The purchase prices are equal to the sum of:

• The average volume-weighted price per share of the company's common stock beginning on April 20 and ending on April 27 (excluding April 22) multiplied by the conversion factor, which is 17.9952 for the 2.75% convertibles, 16.5351 for the 2.5% convertibles and 7.5678 for the 2.25% convertibles; and

• A tender premium of $577 for the 2.75% convertibles, $556 for the 2.5% convertibles and $688 for the 2.25% convertibles.

The offers began April 4 and will expire at 11:59 p.m. ET on April 29.

If a tender offer is oversubscribed, the company will accept notes tendered in that offer on a pro rata basis.

Chesapeake also began tender offers for up to $1 billion principal amount of its straight corporate debt. These offers will also expire at 11:59 p.m. ET on April 29.

None of the tender offers are conditioned on the results of the other offers.

The dealer managers are Deutsche Bank Securities Inc. (855 287-1922, 212 250-7527 or 44 0 20 7545 8011), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106 or 44 0 20 7986 8969) and RBS Securities Inc. (877 297-9832, 203 897-6145 or 44 0 20 7085 4634). The information agent is Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 470-4200).

Chesapeake produces natural gas and is based in Oklahoma City.

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