Chesapeake CEO arranged new $450 million loan from company financier - News and Current Events | futures io social day trading
futures io futures trading


Chesapeake CEO arranged new $450 million loan from company financier
Updated: Views / Replies:652 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Chesapeake CEO arranged new $450 million loan from company financier

  #1 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,872 since Nov 2010
Thanks: 3,301 given, 3,332 received

Chesapeake CEO arranged new $450 million loan from company financier

(Reuters) - In the weeks before Chesapeake Energy CEO Aubrey McClendon was stripped of his chairmanship over his personal financial dealings, he arranged an additional $450 million loan from a longtime backer, according to a person familiar with the transaction.

That loan, previously undisclosed, was made by investment-management firm EIG Global Energy Partners, which was at the same time helping arrange a major $1.25 billion round of financing for Chesapeake itself.

The new loan brings the energy executive's total financing from EIG since 2010 to $1.33 billion and his current balance due to $1.1 billion, this person said. It was secured by McClendon's personal stakes in wells that have yet to be drilled by Chesapeake - and by his own life-insurance policy.

A spokesman for McClendon declined to comment; a spokesman for Chesapeake didn't respond to a request for comment.

The latest insight into McClendon's personal financial deals comes in the wake of an April 18 Reuters investigation that found McClendon had borrowed heavily against his interests in wells owned by Chesapeake, mostly from EIG.

Last week, Reuters reported that McClendon had co-owned and actively invested in a $200 million hedge fund that bought and sold the same commodities produced by Chesapeake.

An outcry over potential conflicts of interest in the loans prompted inquiries by the Securities and Exchange Commission and the Internal Revenue Service. It also spurred Chesapeake's board on May 1 to remove McClendon as chairman (though not as chief executive) and to declare an early end to a controversial perk at the center of the borrowings.

All told, McClendon has taken out loans worth $1.55 billion since 2009 from EIG and other lenders to fund his participation in Chesapeake's Founders Well Participation Program. That perk enables him to receive a stake of up to 2.5 percent in all the wells Chesapeake drills in return for shouldering the same percentage of the wells' costs.

The latest McClendon loan was arranged in late March through a McClendon-controlled company called Pelican Energy LLC, which was formed on March 6.

The deal was initially intended to be significantly larger, up to $750 million, said the person familiar with the transaction. It was scaled back last week after the Chesapeake board announced the early end to the well-stake perk, which is now slated to conclude in June 2014.

The newest financing for McClendon closed shortly before EIG joined with other investment firms and hedge funds, such as TPG Capital and Magnetar Capital, in purchasing preferred shares in a newly formed Chesapeake subsidiary that has an interest in some of the company's wells. EIG invested $100 million in that deal, called CHK Cleveland Tonkawa, which raised $1.25 billion for Chesapeake.

An EIG spokeswoman declined to comment on the newest loan or on concerns of some analysts over EIG's dual role as a financier to Chesapeake and its CEO.

In an April 23 letter to investors in two of EIG's investment funds, EIG chief executive officer R. Blair Thomas said it is "simply untrue" that there was any conflict of interest in its loans to McClendon and dealings with Chesapeake.

The Securities and Exchange Commission has opened an informal inquiry into Chesapeake's well program and the transactions involving McClendon.

In the letter, Thomas discussed two earlier loan deals that EIG had done with McClendon, involving McClendon-controlled entities called Larchmont Resources LLC and Jamestown Resources LLC. There was no mention in the letter of the financing deal completed in March to Pelican Energy.

The person familiar with the deal said Pelican was not mentioned in the letter because EIG clients "already knew about Pelican" and the loan hasn't been disbursed yet.

This person added that when Pelican was launched, EIG sent a letter and "information packet" to clients advising them of the new financing and opening the loan vehicle up to investor participation.

EIG, which spun out of the Los Angeles-based bond shop TCW in 2011, has $13 billion of assets under management.

In the latest $450 million financing, EIG secured as collateral all the assets of Pelican Energy LLC. These include McClendon's interests in wells Chesapeake might drill in 2013 and the first half of 2014. The EIG financing to Pelican will be used to enable McClendon to continue in the Chesapeake well program through June 2014.

For years, McClendon used companies he controls, including Larchmont, Jamestown and Arcadia Resources LP, to hold his stakes in the Chesapeake wells.

EIG funded Larchmont and Jamestown at $375 million and $500 million, respectively. EIG did not lend any money to Arcadia, which borrowed as much as $225 million in 2009.

The investors in the EIG funds that lent to McClendon include U.S. public pension funds, foundations and wealthy investors in Europe and Australia.

In his April 23 letter to clients, Thomas of EIG defended the two prior loans to McClendon, writing: "The crux of the story as it relates to EIG seems to be that we got too good a deal for our investors."


Exclusive: Chesapeake CEO arranged new $450 million loan from company financier - Yahoo! Finance

Reply With Quote

Reply



futures io > > > > Chesapeake CEO arranged new $450 million loan from company financier

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Inside Chesapeake, CEO Ran $200 Million Hedge Fund Quick Summary News and Current Events 0 May 2nd, 2012 01:40 PM
Texas jury slaps $195 million penalty on TaxMasters, CEO Cox kbit News and Current Events 1 April 1st, 2012 07:49 PM
Homeland Security Is Buying 450 Million New Bullets kbit News and Current Events 1 March 29th, 2012 10:28 PM
They arranged the letters kbit Jokes 0 January 15th, 2012 11:07 AM


All times are GMT -4. The time now is 05:53 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-17 in 0.09 seconds with 19 queries on phoenix via your IP 54.163.210.170