S&P ups Chesapeake Energy unsecured debt

S&P said it raised its issue-level rating on Chesapeake Energy Corp.'s unsecured debt to B- from CCC+ and revised the recovery rating to 5 from 6.

The recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 10%) recovery to creditors in the event of a payment default.

The agency said the improvement in the recovery expectations primarily reflects the company's lower amount of priority debt due to the reduced size of its credit facility.

The issue-level rating remains on CreditWatch, where it was placed with positive implications on July 27.

All the other ratings on the company are unchanged.

The CreditWatch placement followed Chesapeake's announcement that it was planning to sell its Utica Basin assets to Encino Acquisition Partners for $2 billion and use the proceeds to repay its debt, S&P said.

“Depending on the amount and type of debt the company repays, we could raise our issue-level rating on its senior unsecured debt by one notch to B,” the agency said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.