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Chesapeake (CHK) Reveals Pricing & Upsizing of Term Loan
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Oklahoma-based Chesapeake Corporation (CHK - Free Report) declared the pricing and the upsizing of a secured five-year term loan as a result of strong demand. The proposed term loan has been upsized to $1.5 billion from a previously announced size of $1.0 billion.
The transaction, which is anticipated to close on or prior to Aug 23, 2016, is dependent on customary closing conditions.
As per the company, the proposed loan will have an interest rate of LIBOR plus 7.50% per annum and will be subject to a 1.00% LIBOR floor. Goldman Sachs Bank USA, Citigroup Global Markets Inc. and MUFG will serve as the joint lead arrangers for the term loan.
The company aims to use the funds raised from the proposed offering for its bond tender offer as well as fund near-term cash needs.
Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. With natural gas advancing significantly from their 17-year lows reached in March and Chesapeake Energy being one of the most gas weighted E&Ps, it is poised to achieve significant share price appreciation. Also, the company’s cost containment measures should work well for the long term.
However, Chesapeake reported adjusted loss per share from continuing operations (excluding special items) of 14 cents for second-quarter 2016, wider than the Zacks Consensus Estimate of loss of 9 cents. The quarterly figure was also wider than a loss of 11 cents a share incurred in the year-earlier quarter. Moreover, the company’s financials are likely to remain under pressure due to the weak commodity pricing environment.
Hence, Chesapeake currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector are Devon Energy Corp. (DVN - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Parsley Energy, Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
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Chesapeake (CHK) Reveals Pricing & Upsizing of Term Loan
Oklahoma-based Chesapeake Corporation (CHK - Free Report) declared the pricing and the upsizing of a secured five-year term loan as a result of strong demand. The proposed term loan has been upsized to $1.5 billion from a previously announced size of $1.0 billion.
The transaction, which is anticipated to close on or prior to Aug 23, 2016, is dependent on customary closing conditions.
As per the company, the proposed loan will have an interest rate of LIBOR plus 7.50% per annum and will be subject to a 1.00% LIBOR floor. Goldman Sachs Bank USA, Citigroup Global Markets Inc. and MUFG will serve as the joint lead arrangers for the term loan.
The company aims to use the funds raised from the proposed offering for its bond tender offer as well as fund near-term cash needs.
Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. With natural gas advancing significantly from their 17-year lows reached in March and Chesapeake Energy being one of the most gas weighted E&Ps, it is poised to achieve significant share price appreciation. Also, the company’s cost containment measures should work well for the long term.
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However, Chesapeake reported adjusted loss per share from continuing operations (excluding special items) of 14 cents for second-quarter 2016, wider than the Zacks Consensus Estimate of loss of 9 cents. The quarterly figure was also wider than a loss of 11 cents a share incurred in the year-earlier quarter. Moreover, the company’s financials are likely to remain under pressure due to the weak commodity pricing environment.
Hence, Chesapeake currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector are Devon Energy Corp. (DVN - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Parsley Energy, Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>