The second largest U.S. producer of natural gas, Chesapeake Energy Corp. (NYSE: CHK) has prevailed in a challenge by Bank of New York Mellon Corp. (NYSE: BK), which sought to prevent the company from redeeming 6.775% notes six years before the notes were due. Chesapeake sued the bank, which was the trustee of the notes and had argued that the redemption notice should have been filed at least a month earlier than the March 15 notice provided by Chesapeake.
Chesapeake will save $100 million in interest charges on the notes after redeeming them at par and refinancing the debt.
In the great scheme of Chesapeake's efforts to reduce its debt burden, $100 million is not a huge amount, but the company needs every dime it can raise. Today's ruling inches Chesapeake nearer to its debt-reduction goal.
Shares of Chesapeake are trading up 1.2% to $19.35 in the first half-hour of trading this morning, in a 52-week range of $13.32 to $22.97.
Filed under: 24/7 Wall St. Wire, Banking & Finance, Bonds, Commodities, Oil & Gas Tagged: BK, CHK