CHK » Topics » Financing Transactions

This excerpt taken from the CHK 10-K filed Mar 1, 2007.

Financing Transactions

During 2005 and 2006, we took several steps to improve our capital structure. These transactions enabled us to extend our average maturity of long-term debt to over nine years with an average interest rate of approximately 6.5%. Maintaining a debt-to-total-capitalization ratio below 50% and reducing debt per mcfe of proved reserves remain key goals of our business strategy.

 

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Table of Contents
Index to Financial Statements

We completed the following significant financing transactions in 2006:

First Quarter 2006

 

   

Amended and restated our revolving bank credit facility, increasing the commitments to $2.0 billion and extending the maturity date to February 2011.

 

   

Issued an additional $500 million of our 6.5% Senior Notes due 2017 in a private placement and used the proceeds of approximately $487 million to repay outstanding borrowings under our revolving bank credit facility incurred primarily to fund our recent acquisitions.

Second Quarter 2006

 

   

Exchanged 83,245 shares of our 4.125% cumulative convertible preferred stock, representing 96.4% or $83.2 million of the aggregate liquidation value of the shares outstanding, for 5.2 million shares of our common stock pursuant to a tender offer.

 

   

Exchanged 804,048 shares of our 5.0% (Series 2003) cumulative convertible preferred stock, representing 95.4% or $80.4 million of the aggregate liquidation value of the shares outstanding, for 5.0 million shares of our common stock pursuant to a tender offer.

 

   

Completed public offerings of $500 million of 7.625% Senior Notes due 2013, 2.0 million shares of 6.25% mandatory convertible preferred stock having a liquidation preference of $250 per share, and 25 million shares of common stock at $29.05 per share. Net proceeds of approximately $1.666 billion were used to fund acquisitions, to repay borrowings under our revolving bank credit facility and for general corporate purposes.

Third Quarter 2006

 

   

Increased the commitments under our revolving bank credit facility to $2.5 billion.

 

   

Issued 3.75 million shares of common stock at $29.05 per share and 300,000 shares of our 6.25% mandatory convertible preferred stock having a liquidation preference of $250 per share upon the exercise of the underwriters’ options to purchase the additional shares pursuant to the June 2006 public offerings of our common stock and 6.25% preferred stock. Net proceeds of approximately $177.6 million were used to repay borrowings under our revolving bank credit facility.

Fourth Quarter 2006

 

   

Completed a public offering on December 5, 2006 of €600 million of 6.25% Euro-denominated Senior Notes due 2017 ($799.5 million based on the dollar/euro exchange rate of $1.3325 to €1.00). Net proceeds of approximately €589.6 million (or approximately $785.7 million) were used to repay outstanding borrowings under our revolving bank credit facility.

 

   

Completed a public offering of 30 million shares of common stock at $32.15 per share. Net proceeds of approximately $955.3 million were used to repay outstanding borrowings under our revolving bank credit facility.

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