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S&P lifts Chesapeake Energy, rates notes CCC-
S&P said it raised the corporate credit rating on Chesapeake Energy Corp. to CCC+ from SD (selective default).
The outlook is negative.
The agency also said it assigned a CCC- rating and 6 recovery rating to the company's proposed $850 million convertible notes due 2026.
The 6 recovery rating indicates 0 to 10% expected default recovery.
S&P also said it raised the ratings on the company's $4 billion first-lien credit facility and $1.5 billion first-lien second-out term loan to B from B- and removed the ratings from CreditWatch, where they were placed with positive implications in August.
The recovery ratings remain at 1, indicating 90% to 100% expected default recovery.
S&P also said it raised the rating on the company's $2.425 billion second-lien notes to B from CCC+ and removed it from CreditWatch positive.
The agency also said it revised the recovery rating to 1 from 2, indicating 90% to 100% expected default recovery.
S&P also said it raised the ratings on the company's euro-denominated notes due 2017 and contingent convertible notes due 2035 to CCC- from CC and removed them from CreditWatch positive.
The recovery ratings remain at 6, indicating 0 to 10% expected default recovery.
The D ratings on Chesapeake's senior unsecured debt and preferred stock are not affected.
The upgrades reflect the company's improving liquidity and an expectation that its credit measures will strengthen over the next 12- to 18-months, S&P said.
Chesapeake has successfully executed several transactions in 2016 to improve both its liquidity and financial performance, the agency said.
Notably these transactions include the company's conveyance of its Barnett Shale assets to Total SA, which should raise estimated cash flows by $200 million to $300 million annually through 2019, S&P said.
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