Chesapeake Amends Credit Facility Agreement With Lenders
11 Avril 2016 - 3:40PM
Dow Jones News
Chesapeake Energy Corp. said it has reached an amended agreement
with its lenders that delays the next review of its $4 billion
revolving credit facility until June of 2017, allows the company to
borrow as much as $2.5 billion and offers relief on some terms of
its debt covenants.
The company's shares, down 75% in the past 12 months, were up
5.1% at $3.95 premarket.
Though Chesapeake's borrowing base was reaffirmed at $4 billion,
the company also has pledged additional assets as collateral as
part of the agreement, though specific details weren't
provided.
Under the amended agreement, Chesapeake will be allowed to incur
up to $2.5 billion of first-lien debt, with its existing lenders
receiving priority when the debt is repaid. Chesapeake's senior
secured debt ratio covenant was temporarily suspended until
September of 2017 and its interest coverage ratio requirement was
reduced through March of next year.
Under the accord, the energy company is required to maintain
liquidity of at least $500 million, which would increase to $750
million if certain credit metrics aren't met at year's end.
The Oklahoma City company, co-founded by the late Aubrey
McClendon, has been working to shore up its balance sheet as
commodity prices remain low. Chesapeake grew to become one of the
dominant U.S. gas explorers during the shale boom. Fueled by cheap
debt, the company expanded aggressively in Ohio, Texas and other
parts of the U.S., becoming the second-largest U.S. natural-gas
producer behind Exxon Mobil Corp.
Mr. McClendon died in a fiery car crash last month, a day after
he was indicted on a charge of conspiring to rig bids on oil and
gas leases in Oklahoma. A pioneer the shale energy boom, his
extreme risk-taking had caused him personal and professional
financial hardships that spurred activist investors, including Carl
Icahn, to oust him as Chesapeake's chief executive in 2013.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
April 11, 2016 09:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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