CHK is in alarming trouble if we cannot get near term maturity holders to go through with this swap. Participation rate has been minimal from 2017/2018 holders. If we can't get them to exchange, Chk will be filling bankruptcy, no if ands or buts about it. Even with participation, it will only delay the bankruptcy if prices do not return to profitable levels.
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Well said in reply. It's hard to believe that a year ago at this time leadership was touting our liquidity and evaluating how to best use the $5B in unrestricted cash CHK was sitting on. Now, after burning nearly all of it and shedding thousands of jobs, they are desperately pleading with debt holders in order to remain afloat and solvent. Perhaps at some point, this industry will learn to smooth out growth and capex as opposed to being completely at the mercy of the market. Probably not, but some times the "way things have always been done" is not the best way of doing something. Even if CHK is somehow able to remain viable, it is highly likely that it will always remain a shell of what it used to be. It will be unable to attract or retain any talent, and when you lose your people everything tends to fall apart rather quickly.
I am hearing that most bondholders of 2017-2019 bonds are protected b/c they bought credit default swaps so they're not going to tender even if the deal is amended to make it more attractive. By holding these credit default swaps, they recover par if CHK files for Chapter 11. It's possible that this is the case. If so, that's not good. If these earlier maturities don't tender, then BK becomes a real risk. No way to really verify but the lack of participation may be in part because some are already protected.