S&P upgrades Chesapeake Energy

S&P said it raised the issuer credit rating on Chesapeake Energy Corp. to B+ from B, along with its senior unsecured debt rating to B+ from B-.

The upgrades reflect both the improved recovery prospects following repayment of its second-lien notes, as well as the higher issuer credit rating.

The agency also said it assigned a B+ issuer credit rating to Brazos Valley Longhorn LLC, a wholly owned unrestricted subsidiary of Chesapeake and successor to WildHorse Resources Development Corp.

S&P also said it affirmed the ratings on WildHorse and withdrew the issuer credit rating as it merged into Brazos.

Brazos will hold the WildHorse assets and was made the issuer of WildHorse's $700 million senior notes, the agency said.

The upgrade on Chesapeake also considers the increased scale of its Eagle Ford assets, creating a large core position in the area and meaningfully increasing the oil content and profitability of its production and reserves, S&P said.

The outlooks on Chesapeake and Brazos are stable, reflecting an expectation that Chesapeake will maintain a modest financial policy that supports liquidity and its improved financial performance, S&P said.

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