Chesapeake Energy 2012 Annual Report Download - page 115

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
105
During 2011, we issued $1.0 billion of 6.125% Senior Notes due 2021 in a registered public offering. We used
the net proceeds of $977 million from the offering to repay indebtedness outstanding under our corporate revolving
bank credit facility.
During 2011, we completed and settled tender offers to purchase the following principal amounts of senior notes
and contingent convertible senior notes. We funded the purchase of the notes with a portion of the net proceeds we
received from the sale of our Fayetteville Shale assets. See Note 11 for further discussion of our Fayetteville Shale
asset sale.
Principal
Amount
Purchased
($ in millions)
7.625% senior notes due 2013 .................................................................................................... $36
9.5% senior notes due 2015 ........................................................................................................ 160
6.25% euro-denominated senior notes due 2017(a) ..................................................................... 380
6.5% senior notes due 2017 ........................................................................................................ 440
6.875% senior notes due 2018 .................................................................................................... 126
7.25% senior notes due 2018 ...................................................................................................... 131
6.625% senior notes due 2020 .................................................................................................... 100
Total senior notes ................................................................................................................ 1,373
2.75% contingent convertible senior notes due 2035 .................................................................. 55
2.5% contingent convertible senior notes due 2037 .................................................................... 210
2.25% contingent convertible senior notes due 2038 .................................................................. 266
Total contingent convertible senior notes ............................................................................ 531
Total ............................................................................................................................ $ 1,904
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(a) We purchased €256 million in aggregate principal amount of our euro-denominated senior notes which had a
value of $380 million based on the exchange rate of $1.4821 to €1.00. Simultaneously with our purchase of the
euro-denominated senior notes, we unwound cross currency swaps for the same principal amount. See Note 9
for additional information.
We paid $2.058 billion in cash for the tender offers described above and recorded associated losses of
approximately $174 million. The losses included $154 million in cash premiums, $20 million of deferred charges, $160
million of note discounts and $2 million of interest rate hedging losses, offset by $162 million of the equity component
of the contingent convertible notes.
During 2011, we purchased $140 million in aggregate principal amount of our 2.25% Contingent Convertible
Senior Notes due 2038 for approximately $128 million. Associated with these purchases, we recognized a loss of $2
million.
In July 2013, the $464 million aggregate principal amount of our 7.625% senior notes will be due. No other
scheduled principal payments are required on our senior notes until 2015.
COO Senior Notes
In October 2011, our wholly owned subsidiaries, Chesapeake Oilfield Operating, L.L.C. (COO) and Chesapeake
Oilfield Finance, Inc. (COF), issued $650 million principal amount of 6.625% Senior Notes due 2019 in a private
placement. COO used the net proceeds of approximately $637 million from the placement to make a cash distribution
to its direct parent, COS, to enable it to reduce indebtedness under an intercompany note with Chesapeake.
Chesapeake then used the cash distribution to reduce indebtedness under its corporate revolving bank credit facility.
The COO senior notes are the unsecured senior obligations of COO and rank equally in right of payment with
all of COO’s other existing and future senior unsecured indebtedness and rank senior in right of payment to all of its
future subordinated indebtedness. The COO senior notes are jointly and severally, fully and unconditionally guaranteed