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Chesapeake Energy Upsizes, Prices Convertible Senior Notes

HLX CHK EPM NGL

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Chesapeake Energy Corporation (CHK - Free Report) recently declared the pricing of private placement of $1.1 billion convertible senior notes. The notes, which are scheduled to mature by 2026, will likely have an interest rate of 5.5%. The company has upsized the private placement from the earlier amount of $850 million.

Private placement generally means that the notes will be sold to few selected investors. In fact, the company motioned that the investors are qualified institutional buyers. Notably, initial purchasers will receive a 30-day option to buy up to an extra $150 million aggregate principal amount of notes.

Chesapeake is anticipated to close the private placement on Oct 5, 2016 upon fulfillment of customary closing conditions. The net proceeds from the offering will likely be utilized for general corporate activities like repurchase of debt and repayment of senior notes that are slated to mature in the near term.

Oklahoma-based Chesapeake is an independent oil and gas player involved in activities like acquisition, development and production of oil and gas resources in the U.S. The company is one of the industry’s most active players in terms of asset portfolio management through a combination of acquisitions and disposals.

However, the company’s financials are likely to remain under pressure due to the weak commodity pricing environment.

As a result, Chesapeake currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.

CHESAPEAKE ENGY Price

 

Some better-ranked players in the energy sector include NGL Energy Partners LP (NGL - Free Report) , Evolution Petroleum Corp. (EPM - Free Report) and Helix Energy Solutions Group, Inc. (HLX - Free Report) . NGL Energy and Evolution Petroleum sport a Zacks Rank #1 (Strong Buy), while Helix Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NGL Energy Partners’ expects a year-over-year increase of 554% in earnings for the current year.

Evolution Petroleum anticipates earnings to grow 218.2% year over year in the current year.

Helix Energy beat the Zacks Consensus Estimate in each of the last four quarters with an average earnings beat of 31.42%.

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