NEW YORK (TheStreet) -- Shares of Chesapeake Energy (CHK) - Get Report were slumping 8.15% to $6.19 in early-morning trading on Thursday as the Oklahoma City-based company announced a private placement of $850 million in convertible notes due 2026.
Chesapeake will use the proceeds from the offering for "corporate purposes," which could include debt repurchases and the repayment of its credit facility and senior notes as they become due, the company said in a statement this morning.
The company is granting buyers the 30-day option to purchase an additional $150 million aggregate principle amount of notes.
Additionally, the natural gas and oil company said in an SEC filing that it's been subpoenaed by the DOJ to provide documents, information and testimony related to investigations into possible antitrust violations in connection with oil and natural purchases in various states.
As part of the investigation, the DOJ is looking into Chesapeake's accounting methodology for the acquisition and classification of oil and natural gas properties, the company said.
Chesapeake said it's also received DOJ, U.S. Postal Service and state subpoenas seeking information on its royalty payment practices.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Chesapeake Energy as a Sell with a ratings score of E+. This is based on the combination of unfavorable investment measures, which should drive this stock to significantly underperform the majority of stocks that it rates. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: CHK