Struggling Chesapeake Energy Wednesday announced it has secured a term loan facility of up to $1.5 billion from four banks, Kallanish Energy reports.
The funds are coming from JP Morgan Chase Bank, Morgan Stanley Bank, Bank of America and MUFG Bank.
The Oklahoma-based company has a reported $10 billion of debt. The loans are intended “to assist with the arrangement of a secured first lien last out 4.5-year term loan facility in the aggregate principal amount of up to $1.5 billion,” the company said, in a statement.
The first-lien will be from one or more commercial banks, and will be secured by the same collateral securing Chesapeake’s existing revolving credit facility.
Chesapeake said it will use the net proceeds to finance a tender offer and consent solicitation for unsecured notes issued by Brazos Valley Longhorn, L.L.C. and Brazos Valley Longhorn Finance Corp. Both are wholly owned subsidiaries of Chesapeake.
The money will be used to retire Brazos Valley’s existing secured revolving credit facility.
“Chesapeake expects these transactions to improve its financial flexibility, as they will allow Brazos Valley and its subsidiaries to support Chesapeake’s current and future debt,” it said.
Amounts borrowed under the new term loan facility will be unconditionally guaranteed on a joint and several basis by Chesapeake’s direct and indirect whollyowned domestic subsidiaries that are guarantors under the company’s revolving credit facility, including…