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Chesapeake Energy increases tender offer, prices term loan

Chesapeake Energy Corp. amended its previously announced cash tender offer to purchase 6.875% senior notes due 2025 issued by its subsidiaries Brazos Valley Longhorn LLC and Brazos Valley Longhorn Finance Corp.

Under the amendment, Chesapeake is now offering to pay $950 for every $1,000 of notes validly tendered, according to a Dec. 10 news release. The company previously offered to pay $920 for every $1,000 of notes tendered.

Noteholders who tender at or before 5 p.m. ET on Dec. 19 are eligible to receive an early tender premium of $50 per $1,000 of notes tendered. The tender offer is scheduled to expire at 11:59 p.m. ET on Jan. 6, 2020.

Chesapeake also priced its proposed $1.5 billion term loan, the proceeds of which will be used to fund the tender offer for the 2025 notes and retire Brazos Valley's existing secured revolving credit facility, according to a separate same-day news release. The 4.5-year loan will bear interest at the London interbank offered rate plus 8.00% per annum.

The transactions are expected to allow Brazos Valley and its subsidiaries to support Chesapeake's debt, according to the news release.

Closing of the term loan is slated to occur on or around Dec. 23, subject to customary conditions.