Fitch lifts Chesapeake Energy

Fitch Ratings said it upgraded Chesapeake Energy Corp.’s long-term issuer default rating and senior unsecured ratings to BB from BB- and convertible preferred stock to B+ from B-.

The upgraded ratings include the company’s senior unsecured notes to BB from BB- and its senior secured revolving credit facility at BBB-.

The outlook remains positive.

The upgrade results from debt reduction and capital-structure simplification over the past few months, Fitch said.

Notably, the company spun-off its oil-services division, which resulted in debt reduction of more than $1 billion and retirement of the $1.06 billion in preferred interest of CHK Utica, which was treated as adjusted debt, Fitch said.

The positive outlook is driven by Chesapeake management’s intention to further de-lever and simplify its capital structure and expectations of significantly reduced free cash flow deficits in the future, the agency said.

The ratings reflect the company’s large asset base, operating profile and levered capital structure, Fitch said.

The company’s levered capital structure offsets the strengths of Chesapeake’s asset base and operating profile, the agency added.

© 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.