Daily News: September 13, 2018

MUFG Agents Chesapeake Energy $3.8B Revolver


Chesapeake Energy amended its senior secured revolving credit facility agreement, receiving initial commitments from 15 institutions totaling $3.8 billion, which exceeded the $3 billion borrowing base the company was seeking.

The initial borrowing base does not include any properties being sold in the company’s $2 billion Utica Shale transaction expected to close in Q4/18, so the borrowing base will not be affected when the transaction closes. The credit facility will mature in September 2023.

“We are very pleased with the five-year renewal of our credit facility which demonstrates the confidence of our bank group in Chesapeake’s future. We were able to reduce our borrowing base to $3 billion based on our significantly improved cash flow profile, operating and capital efficiency and the strength of our portfolio after our planned Utica Shale divestiture. The decreased size of the facility will result in reduced costs while maintaining an ample liquidity backstop with significant cushion to execute an optimal business plan through commodity cycles,” said Nick Dell’Osso, Chesapeake’s executive vice president and chief financial officer.

The credit facility is led by MUFG Union Bank as administrative agent, co-syndication agent, swingline lender and a letter of credit issuer. Wells Fargo Bank and JPMorgan Chase Bank were co-syndication agents, swingline lenders and letter of credit issuers. MUFG, Wells Fargo Securities, JPMorgan Chase, Merrill Lynch, BMO Capital Markets, Citicorp North America, Crédit Agricole Corporate and Investment Bank, Mizuho Bank and Royal Bank of Canada served as joint lead arrangers and joint bookrunners for the transaction.

Chesapeake intends to use this credit facility for working capital and general corporate purposes.