Standard & Poor’s on Thursday declared Chesapeake Energy is in technical default of its debt because creditors were required to take less than promised in the independent producer’s recent debt-for-equity swap.
Chesapeake’s new corporate debt rating is “SD” for selective default, Kallanish Energy reports.
“We view the exchanges as distressed because the investors are receiving less than the original promise and the company is currently holding, in our view, an overleveraged capital structure with potential liquidity issues in the near-term due to total 2017 maturities and a likely put totaling about $1.5 billion,” S&P said.
Chesapeake could not be reached to comment.
Chesapeake’s prior rating was “CCC”, which indicated there were substantial risks, but was still three steps higher than a “C” rating, which means default is imminent.Read more by clicking here.
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