S&P cuts Chesapeake Energy notes

S&P said it lowered the issue-level ratings on Chesapeake Energy Corp.'s 7% senior notes due 2024, 7½% senior notes due 2026 and 8% senior notes due 2026 to D from CC following completion of a below-par debt exchange that the agency views as distressed.

As part of an earlier exchange, the issue-level ratings on Chesapeake's 8% senior notes due 2025 and 8% senior notes due 2027 are already rated D.

Chesapeake Energy completed the exchange of $3.22 billion of the following securities for a total of $2.2 billion of 11½% second-lien notes due 2025: $226 million 7% senior notes due 2024, $281 million 7½% senior notes due 2025, $998 million 8% senior notes due 2025, $873 million 8% senior notes due 2026 and $837 million of 8% senior notes due 2027.

The company also completed the repurchase of $616.2 million of the Brazos Valley Longhorn LLC 6 7/8% notes due 2025 at par value and repaid and terminated the Brazos credit facility.

S&P withdrew the issuer credit rating on Brazos Valley Longhorn and the issue-level rating on the Brazos notes.

The SD issuer credit rating on Chesapeake Energy is unchanged. The ratings on the company's remaining senior unsecured debt issues and preferred stock remain on CreditWatch negative.

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