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Sept. 10, 2019, 7:31 a.m. EDT

Chesapeake Energy stock falls after issuing 250.7 million common shares in exchange for debt, preferred stock

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By Tomi Kilgore

Chesapeake Energy Corp. /zigman2/quotes/201364537/composite CHK -1.53% said Tuesday it entered into a privately negotiated agreement to issue a total of 250.7 million shares of common stock in exchange for senior notes and convertible preferred stock. the stock slumped 2.1% in premarket trading. "We had an opportunity to partner with a large, multi-asset investment manager who believes in the long-term value of our common shares and, in doing so, retired a portion of our debt and preferred stock at a significant discount to its par value and reduced our annual interest and preferred dividend payments by approximately $35 million," said the oil and gas company's chief executive, Doug Lawler. The common stock issuance represents 15.3% of the 1.63 billion shares outstanding as of July 31. The stock will be exchanged for $40 million in 5.75% convertible preferred stock, $112.7 million in 4.875% senior notes due 2022, $129.3 million in 5.75% senior notes due 2023, $155.8 million in 5.5% convertible senior notes due 2026 and $150 million in 8.0% senior notes due 2027. The stock has shed 10.0% year to date through Monday, while the SPDR Energy Select Sector ETF /zigman2/quotes/206420077/composite XLE -0.52% has gained 5.0% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.39% has rallied 18.8%.

/zigman2/quotes/201364537/composite
US : U.S.: NYSE
$ 1.29
-0.02 -1.53%
Volume: 34.84M
Oct. 18, 2019 6:30p
P/E Ratio
2.48
Dividend Yield
N/A
Market Cap
$2.10 billion
Rev. per Employee
$4.37M
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/zigman2/quotes/206420077/composite
US : U.S.: NYSE Arca
$ 57.03
-0.30 -0.52%
Volume: 10.28M
Oct. 18, 2019 8:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
2,986.20
-11.75 -0.39%
Volume: 1.99B
Oct. 18, 2019 5:08p
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