Chesapeake Energy Corp has gone to court to sue its trustee Bank of New York Mellon Corp seeking redemption of more than US$1.3 billion in notes earlier than maturity date in order to avoid payment of interest. In a statement, Chesapeake said that it would be asking a judge to confirm a notice issued on or before March 15 to redeem the notes at par value.
The court filing stated that "Chesapeake has recently learned that BNY Mellon is operating under the misunderstanding that the deadline for issuing such notice has already passed." The filing also said that the holders of the notes must be paid future interest on the notes that would fall due on 2019.
The Oklahoma based oil and natural gas producer's was traded at 105.3 cents with a yield of 5.73% which is above the debt at par value of 100 cents under the debt's covenants and agreements.
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