Fitch affirms Chesapeake

Fitch Ratings said it affirmed the ratings of Chesapeake Energy Corp. following the company's announcement that it has agreed to acquire Columbia Natural Resources, LLC for $2.2 billion plus the assumption of liabilities.

The outlook is stable.

Fitch rates Chesapeake's senior unsecured debt at BB, senior secured revolving credit facility and hedge facility at BBB- and convertible preferred stock at B+.

Fitch said the rating affirmation and outlook reflect the size and scope of Chesapeake's reserve base following the acquisition of Columbia, the quality and price paid for the reserves and the balanced mix of debt and equity used to finance the acquisition.

The ratings are also supported by Fitch's expectations that Chesapeake will continue to aggressively grow its resource base through further acquisitions, that the company will continue to show significant reserve growth through organic efforts, and that the company will likely remain free cash flow negative despite the current commodity price environment due to the significant expenditures for organic growth.

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