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S&P ups Chesapeake Energy
S&P said it raised its corporate credit rating on Chesapeake Energy Corp. to B- from CCC+ and removed the ratings from CreditWatch with positive implications where S&P had placed them on Dec. 6.
The outlook is positive.
S&P also raised its issue-level ratings on the company's senior secured first- and second-lien debt to B+ from B and removed the ratings from CreditWatch, where S&P placed them with positive implications on Dec. 6. The recovery ratings remain 1, indicating an expectation for very high (90%-100%) recovery of principal in the event of a payment default.
S&P also raised the ratings on the senior unsecured debt, including the debt issues that have not been subject to a distressed exchange, to CCC from CCC- and removed them from CreditWatch with positive implications. The recovery ratings remain 6, indicating an expectation for negligible (0%-10%) recovery of principal in the event of a payment default.
At the same time, S&P also raised the issue-level ratings on the company's senior unsecured debt issues that had been subject to a distressed exchange to CCC from D.
S&P said its D rating on Chesapeake's preferred stock is not affected.
“The upgrade of Chesapeake to B- reflects our assessment of the company's improved liquidity profile and financial measures,” said S&P credit analyst Paul Harvey in a news release. “In addition, the positive outlook assumes that this trend will continue, with our expectation that credit measures will continue to strengthen over the next 12-18 months such that average funds from operations to debt could exceed 12% on a sustained basis.”
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