Fitch gives Chesapeake notes, convertibles BB

Fitch Ratings said it assigned a BB rating to Chesapeake Energy Corp.'s proposed note offering of $800 million senior notes and $500 million contingent convertible notes.

The outlook remains negative.

Fitch said it rates Chesapeake's debt as follows: issuer default rating at BB, senior unsecured debt at BB, senior secured revolving credit facility and hedge facilities at BBB- and convertible preferred stock at B+.

Chesapeake's outlook remains negative primarily as a result of the company's high leverage as measured by debt/barrels of oil equivalent, which is driven by the company continuing to outspend operating cash flows, the agency noted.

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