Chesapeake Energy Corp. on Monday announced plans to help improve its balance sheet by refinancing up to $2.3 billion in debt.
The Oklahoma City natural gas and oil company said it plans to issue $2.3 billion in new long-term debt to be used in part to pay for its planned debt buyback program.
The new offering will be comprised of three series of notes: $500 million in 3.25 percent senior notes due 2016, $700 million in 5.375 percent senior notes due 2021 and $1.1 billion in 5.75 percent senior notes due 2023.
The new notes are scheduled for issuance April 1, the same day outgoing CEO Aubrey McClendon said he will leave the company.
Proceeds of the sale would be used in part to buy back more expensive debt, Chesapeake said.
“The purpose of the tender offer is to reduce interest costs and to lengthen the maturity profile of our outstanding indebtedness,” the company said in Monday's filings.
Chesapeake on Monday announced plans to buy back at least some of its 7.625 percent senior notes due 2013 and 6.875 percent senior notes due 2018.
The company also hopes to buy back its $1.3 billion in 6.775 percent senior notes due 2019, although that issue has been more difficult.
Bondholder Bank of New York Mellon sued earlier this year, saying Chesapeake must pay an additional $400 million in interest because it waited too long to announce its buyback plan.
U.S. District Judge Paul Engelmayer of the Southern District of New York on Thursday denied Chesapeake's request for a preliminary order, but said it is “overwhelmingly likely” that he eventually would side with the Oklahoma City company's interpretation.