Chesapeake plans to issue $2 bln in loans to cull expensive debt

Nov 1 (Reuters) - Chesapeake Energy Corp said Thursday it is working with banks to issue $2 billion in debt to pay off more-expensive loans on its bloated balance sheet.

The company said it is setting up a five-year term loan facility, and would use proceeds to pay off a loan it obtained in May of this year, as well as other debt.

Earlier this year a series of Reuters investigations raised questions about potential conflicts of interest on the part of Chief Executive Aubrey McClendon and alleged collusion over land prices.

The company is set to post quarterly earnings after the close of the stock market on Thursday.

Bank of America Corp, Goldman Sachs Group Inc and Jefferies Group Inc are working with Chesapeake on the new loan facility.