This excerpt taken from the CHK 8-K filed Nov 1, 2005.
6. Debt and Commitments
In August 2003, The Company obtained funding through a syndicated borrowing instrument managed by Fleet Bank (Fleet) to finance the acquisition, merger, and subsequent operation of Columbia Energy Resources. Under the terms of the debt instrument, the Company obtained authorization to borrow up to $500 million for a period of five years. In the initial year, $225 million was drawn and was outstanding at December 31, 2003. It was projected at acquisition that additional draws would be required over the subsequent 18 months to support operating expenses and capital expenditure investments during the course of satisfying the Companys forward gas sale agreement (see note 2). During 2004, additional borrowings totaling $125 million were drawn. No principal amounts have been paid on the amount borrowed. Under the provisions of the Fleet debt instrument, interest is determined according to a LIBOR-indexed rate, plus 300 basis points. The loan is collateralized with virtually all of the Companys assets. The initial term of the debt instrument was five years although there is no specified time period for debt repayment. As of December 31, 2004 and 2003, the Company had $350 million and $225 million outstanding, respectively, the total of which was classified as long-term debt. The average daily balance of the Companys Fleet debt was approximately $288.4 million over the course of 2004 and $225.0 million during the four months ending December 2003.
In January 2005, the Company entered into a new syndicated loan managed by Bank of America and refinanced the debt previously held with Fleet Bank. Under the terms of the new debt instrument, the Company obtained a credit facility of $1.25 billion with a borrowing base of $850 million for a period of five years. Interest is to be determined according to a market-indexed rate at time of draw, plus 225 basis points and payment is due January 2010. The loan is collateralized with virtually all of the Companys assets. As of March 15, 2005, $715 million had been borrowed against this line. In January 2005, the Company wrote off $9.3 million of unamortized financing cost related to the previous Fleet debt instrument.
Interest paid was $15.1 million and $2.8 million during the periods ended December 31, 2004 and 2003, respectively.