Chesapeake Energy exchanges 94% of 6.25%, 99% of 5% convertible preferreds

By Jennifer Chiou

New York, Nov. 21 - Chesapeake Energy Corp. announced the completion of the exchange offer for its 2.3 million shares of 6.25% mandatory convertible preferred stock and for its 4.6 million shares of 5% cumulative convertible preferred stock.

The offers expired at midnight ET on Tuesday.

Chesapeake said that holders of 2,152,132 shares, or 94%, of the 6.25% preferreds and 4,535,880 shares, or 99%, of the 5% preferreds tendered their securities in exchange for common shares.

For the 6.25% preferreds, the exchange ratio was 8.0549 common shares, which is equal to the sum of 6.25 common shares and a number of additional common shares equal to $71.43 divided by $39.576, the volume-weighted average price of the stock from Nov. 2 to the pricing date.

The ratio for the 6.25% preferreds was subject to a maximum of 8.5542 common shares and a minimum of 7.7698 common shares.

For the 5% preferreds, the exchange ratio was 4.1974 common shares, which is equal to the sum of 3.50 common shares and a number of additional common shares equal to $27.60 divided by $39.576. The ratio was capped at a maximum of 4.3903 common shares and a minimum of 4.0872 common shares.

The exchange ratios for both series of preferred stock were determined after 5 p.m. ET on Friday. The company said 147,868 shares of the 6.25% preferreds and 64,120 shares of the 5% preferreds will remain outstanding.

Georgeson Inc. (888 605-8334) was the information agent.

Chesapeake is an Oklahoma City-based independent producer of natural gas.

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