Chesapeake to pay down bulk of $4 billion term loan

Chesapeake Energy Corp (CHK.N) plans to pay off more than half of a pricey $4 billion bridge loan after receiving $2.8 billion in cash from the sale of some of its oil and gas properties in the Permian Basin.

The loan, made in May, was a lifeline at the time for the U.S. energy company that was staring at a funding shortfall of about $10 billion. So far this year, Chesapeake has sold about $12 billion of its assets, a situation that has alleviated its liquidity crunch.

Chesapeake's investment bankers on the Permian deal, Goldman Sachs (GS.N) and Jefferies Group (JEF.N), provided the loan. In May, Chesapeake replaced $4 billion in existing debt with the new $4 billion that came at a steep 8.5 percent interest rate, and would rise to more than 11 percent if the company did not pay it off by the end of the year.

Read Full Article from Reuters

- Posted: 2012-10-22 17:53:24

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