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NEW YORK (Reuters) - Far from the drilling rigs of Oklahoma, America's second-largest natural gas producer is having to dig ever deeper into the well that really fueled its growth: Wall Street.
In a Times Square office building, a team tapped by Chesapeake Energy Corp deployed more than 40 bankers, lawyers and other experts to plot another chapter in that strategy.
Dubbed Glenn Pool, it was more financial engineering than petroleum engineering. In essence, Chesapeake sold future rights to the gas in its wells. The deal took in approximately $850 million last year.
(US$500 million of which was from Temasek:
Temasek takes $690m stake in US energy firm
Investment comprises non-voting stock in top natural gas producer.
Fri, May 14, 2010
The Straits Times
By Jessica Cheam
SINGAPORE investment firm Temasek Holdings is pumping US$500 million (S$690 million) into a leading US producer of natural gas.
New York-listed Chesapeake Energy, which is on a fund-raising drive, said in a statement on Monday that Temasek will subscribe to US$500 million of its convertible preferred shares.
Preferred stockholders receive dividends that are usually paid out before dividends to common stockholders. They do not usually have voting rights.
Temasek will get a 5.75 per cent cumulative dividend. The stock can be converted to common stock at US$27 a share).)
Glenn Pool proved so innovative that a trade magazine honored it this March. In an especially creative twist, the borrowings were chopped into two slices and sold to investors - akin to the way subprime housing loans were turned into securities and sold last decade.
Deals like Glenn Pool are known as volumetric production payments, or VPPs. These and other sophisticated financings are central to the business model of a company that in some ways resembles a hedge fund, using borrowed money to make big financial bets.
- http://sg.finance.yahoo.com/news/special-report-chesapeakes-deepest-well-011809870.html
In a Times Square office building, a team tapped by Chesapeake Energy Corp deployed more than 40 bankers, lawyers and other experts to plot another chapter in that strategy.
Dubbed Glenn Pool, it was more financial engineering than petroleum engineering. In essence, Chesapeake sold future rights to the gas in its wells. The deal took in approximately $850 million last year.
(US$500 million of which was from Temasek:
Temasek takes $690m stake in US energy firm
Investment comprises non-voting stock in top natural gas producer.
Fri, May 14, 2010
The Straits Times
By Jessica Cheam
SINGAPORE investment firm Temasek Holdings is pumping US$500 million (S$690 million) into a leading US producer of natural gas.
New York-listed Chesapeake Energy, which is on a fund-raising drive, said in a statement on Monday that Temasek will subscribe to US$500 million of its convertible preferred shares.
Preferred stockholders receive dividends that are usually paid out before dividends to common stockholders. They do not usually have voting rights.
Temasek will get a 5.75 per cent cumulative dividend. The stock can be converted to common stock at US$27 a share).)
Glenn Pool proved so innovative that a trade magazine honored it this March. In an especially creative twist, the borrowings were chopped into two slices and sold to investors - akin to the way subprime housing loans were turned into securities and sold last decade.
Deals like Glenn Pool are known as volumetric production payments, or VPPs. These and other sophisticated financings are central to the business model of a company that in some ways resembles a hedge fund, using borrowed money to make big financial bets.
- http://sg.finance.yahoo.com/news/special-report-chesapeakes-deepest-well-011809870.html
