(Corrects redemption terms in paragraph 1)
March 15 Chesapeake Energy Corp notified
on Friday that it would try to redeem $1.3 billion of notes at
par, a day after the company failed to win a court order that
would have allowed the redemption.
Bond trustee Bank of New York Mellon Corp and a group
of investors holding $250 million of the notes had said that
Chesapeake should be subject to a "make-whole" provision on the
6.775 percent notes maturing in 2019.
The second-largest U.S. natural gas producer, which is
looking to cover a potential $4 billion cash shortfall this
year, had said the "make-whole" provision could cost it an extra
"... The court stated multiple times that it is
'overwhelmingly' likely that the company's notice to redeem at
par will not be determined by the court to be a notice to redeem
under the 'make-whole' provision of the indenture, even if the
notice to redeem at par is ultimately deemed untimely," the
company said in a statement.
The case is Chesapeake Energy Corp. v. Bank of New York
Mellon Trust Co NA, U.S. District Court, Southern District of
New York, No. 13-01582.
(Reporting by Swetha Gopinath in Bangalore)