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Chesapeake swaps debt for equity for second time in May

[BENGALURU] Chesapeake Energy Corp, the second-largest US natural gas producer, said on Monday it had issued or agreed to issue about 5 per cent of its outstanding shares in exchange for debt over the past week, the second such transaction this month.

Chesapeake and other oil and gas producers have been undertaking debt-for-equity swaps or bond swaps to reduce interest payments and debt, taken on during a frenzy of shale development.

The company, which has more than US$9 billion in debt, said on Monday it issued or agreed to issue about 37.1 million shares between May 16 and May 23 in exchange for senior notes worth about US$166 million.

The notes are due in 2017, 2019, 2037 and 2038. Chesapeake swapped US$153 million of debt for about 4 per cent of its equity earlier this month.

Up to Monday's close of US$3.67, Chesapeake's stock had lost more than three-fourths of its value over the past year.


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