The Bank of New York Mellon Corporation (NYSE:BK) Appeals against Chesapeake’s Early Bond Recall - CHK

Northern, WI 05/13/2013 (usmarketsdaily) - The world’s biggest custody bank, Bank of New York Mellon Corp. (NYSE:BK) (Closed: $28.29, Up by 0.39%) wants its client Chesapeake Energy Corp. (NYSE:CHK) (Closed: $20.15, Up by 2.91%) to delay the recall of its debt and had thereby appealed against ruling in favor of the energy producer.

Ruling on Bond Recall

The second largest natural gas producer in the United States, Chesapeake Energy Corp. (NYSE:CHK) intends to save $100 million by tapping the merit of lower interest rates prevailing in the markets. With this intention, the energy producer had decided to refinance the bonds it had issued to the investors through an early recall.

However, the move was challenged at the Federal Court by Bank of New York Mellon Corp. (NYSE:BK) on which the US District Judge Paul Engelmayer on May 08 ruled that the early recall of bonds was acceptable. In line with this ruling, Chesapeake Energy Corp. (NYSE:CHK) has planned to execute the recall on May 13, 2013.

BNY Mellon Corp’s claim

The custodian bank of the debt, however is not satisfied with the ruling and thereby had appeal against the same. Bank of New York Mellon Corp. (NYSE:BK) argues that the early recall of bonds should have been completed by March 15 as per the guidelines laid out in the indenture designed at the time of issue.

However, Chesapeake Energy Corp. (NYSE:CHK) announced the recall only on the last date specified arguing that the March 15 deadline was for sending notice to the investors and not for execution of recall.

About the Author

Colton Eisler is a special projects and general assignment reporter, noted for breaking several exclusive stories. Colton Eisler study Broadcast Journalism, Music and Theatre at Troy University. He also has a degree in Public Relations. Colton Eisler has won several awards for his work, being recognized by the Associated Press, National Association of Journalist, The Liberty Theater Company, Volunteers of America, The Kwanis Club, MTM Unsung Heroes and many more.

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