Chesapeake Debt Downgraded at Fitch
Late last Friday, credit rating firm Fitch Ratings downgraded the already low corporate credit rating of Chesapeake Energy Corp. (NYSE: CHK) from ‘BB’ to ‘BB-’. The firm also lowered its rating on Chesapeake’s preferred stock from ‘B+’ to ‘B’ and…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Earlier last week S&P issued a similar downgrade on Chesapeake’s credit. In its report, Fitch said:
The downgrade reflects the company’s aggressive spending amid a period of expected weak natural gas price realizations and concerns relating to constrained liquidity longer term given the planned spending.
Fitch’s concerns are focused on the Chesapeake’s liquidity, which the ratings firm points out depends on Chesapeake’s ability to shed assets. S&P took a somewhat broader view, citing “revelations that underscore shortcomings in Chesapeake’s corporate governance practices, [and] covenant concerns” as well. However one looks at it, Chesapeake’s salad days are behind it.
The report from Fitch Ratings is available here.
Chesapeake’s closed up 6% on Friday, at $14.36 in a 52-week range of $13.32-$35.75.
Paul Ausick
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
