Moody’s revises Chesapeake Energy view to stable

Moody’s Investors Service said it changed the outlook for Chesapeake Energy Corp. to stable from negative, affirmed the company’s Caa1-PD and appended the rating with an LD designation.

Moody’s upgraded the company’s speculative grade liquidity rating to SGL-3 from SGL-4. The company’s other ratings were affirmed. At the same time, Moody’s withdrew Brazos Valley Longhorn, LLC’s Caa1 corporate family rating and the Caa2 senior unsecured notes rating of Brazos Valley’s predecessor entity, WildHorse Resource Development Corp.

The actions follow completion of a debt exchange Chesapeake started on Dec. 4. The company exchanged $3.2 billion of its senior unsecured notes for $2.21 billion of second-lien notes Moody’s said it considers the debt exchange a distressed exchange, which is a default under the rating agency’s definition. As such, Moody’s appended the PDR with an /LD designation to indicate a limited default, which will be removed after three business days.

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