Fitch lowers Chesapeake Energy

Fitch Ratings said it downgraded Chesapeake Energy Corp.’s long-term issuer default rating to B- from B.

The outlook remains negative.

The downgrade reflects the company’s heightened liquidity risk given the prospect for a lower and longer price recovery profile, Fitch said.

The rating also reflects the potential for low hydrocarbon prices, which might negatively impact the company’s plans to raise liquidity through asset sales, the agency said.

This increases the prospect that the company might more quickly and heavily rely on its revolving credit facility to fund upcoming debt maturities, Fitch said.

The ratings also consider the company’s considerable size with the potential for more liquids-focused production, substantial asset base and strong operational execution and flexibility, Fitch said.

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