2023-04-13 12:57:23 ET
Chesapeake Energy ( NASDAQ: CHK ) +2.1% in Thursday's trading as Fitch Ratings upgraded its long-term credit rating to BB+, the highest "junk" rating, from BB, with a "positive" outlook, indicating the next rating move would lift the company to investment grade.
Another upgrade would take Chesapeake's longer-term issuer default rating to BBB-, which is the lowest investment-grade rating.
Chesapeake's ( CHK ) rating "reflects its strong gas positions in the Marcellus and Haynesville plays, sub-1x EBITDA leverage, the company's liquidity and backend weighted maturity profile," Fitch wrote , adding it also considered the company's increasing gas weighting, which typically generate lower netback's than more oil weighted E&Ps.
S&P Global Ratings rates Chesapeake's ( CHK ) credit at BB, two notches below investment grade, with a "stable" outlook, while Moody's rates Chesapeake at Ba2, also two notches below investment grade, but with a "positive" outlook.
Chesapeake Energy ( CHK ) may reduce dividends in Q1, but "hotter weather and declining supplies could lead prices to head back up and this could result in Chesapeake's dividend rebounding" in Q2, The Value Analyst writes in a report published recently on Seeking Alpha .
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Chesapeake Energy's credit upgraded with positive outlook at Fitch