March 15, 2013 / 12:30 PM / 5 years ago

CORRECTED-Chesapeake to redeem $1.3 bln notes at par

(Corrects redemption terms in paragraph 1)

March 15 (Reuters) - 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 $400 million.

“... 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)

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