Daily News: December 29, 2014

MUFG Union Bank Agents $4B Chesapeake Energy Revolver

Chesapeake Energy announced that it closed on a new five-year, $4 billion senior unsecured revolving credit facility. The new facility replaces the existing $4 billion senior secured revolving credit facility that was scheduled to mature in December 2015. The aggregate commitments may be increased up to an additional $1 billion, and the new credit agreement matures December 15, 2019, with two, one-year extension options, each of which is subject to lender approval and certain customary provisions.

Nick Dell’Osso, Chesapeake’s CFO, commented, “We are very pleased with the size and terms of our new credit facility, which is more flexible and has been structured to include investment grade-like terms, and allows Chesapeake to release nearly $6.0 billion of proved reserve-based collateral. The improved credit terms available to our company today, despite this time of significant market volatility, serve as recognition of Chesapeake’s greatly simplified balance sheet and dramatically improved operating and financial results. This facility provides a significant amount of liquidity to Chesapeake while offering great optionality to take advantage of current market conditions.”

The new credit facility was led by MUFG Union Bank as administrative agent, co-syndication agent, swingline lender and a letter of credit issuer; and Wells Fargo Bank as co-syndication agent, swingline lender, and a letter of credit issuer. Bank of America, Crédit Agricole Corporate and Investment Bank and JPMorgan Chase Bank are co-documentation agents and letter of credit issuers. MUFG Union Bank and Wells Fargo Securities served as joint lead arrangers and joint bookrunners for the transaction. Chesapeake intends to use the proceeds of the new unsecured credit facility for working capital and general corporate purposes.

Chesapeake Energy is the second-largest producer of natural gas and the 11th largest producer of oil and natural gas liquids in the U.S.