Chesapeake High-Grade Hopes Dashed as McClendon-Era Deals Sting
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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.