Chesapeake's Efforts to Improve Credit Rating Offset by Low Oil and Gas Prices

From Bloomberg Business:
Chesapeake Energy Corp. was nursing hopes of investment-grade credit ratings just a few months ago. Now, debt investors’ confidence is slipping away as onerous pipeline contracts and slumping commodity prices crimp its profit. 
A gauge of the company’s credit risk has deteriorated to a level not seen since the departure of former Chief Executive Officer Aubrey McClendon in 2013 as shareholders revolted over his personal stakes in company wells. The shale-gas company is at risk of violating a loan agreement with its bankers this year, which would limit access to a $4 billion credit line at the same time analysts expect earnings to drop. 
Sentiment has soured on the Oklahoma City-based producer as the collapse in energy prices during the past eight months has made its $11.5 billion of debt more vulnerable to deals struck under McClendon the negative effects of which become increasingly exaggerated as energy prices fall. Chesapeake had been trying to boost its credit quality by cutting borrowings and shifting toward more profitable crude oil production. 
‘Striking Distance’ 
“We thought that investment grade was going to be within striking distance, but now the wind has been taken out of the sail,” Brian Gibbons, a senior analyst at CreditSights Inc, said in a telephone interview. “The move down in oil and gas prices is more than compensating for the company’s internal improvements.” 
Chesapeake must maintain leverage -- measured by its ratio of debt to earnings before interest, taxes, depreciation and amortization -- of below four times to remain in compliance with its loan terms.
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