S&P gives Chesapeake Energy notes, convertibles BB

Standard & Poor's said it assigned its BB rating to Chesapeake Energy Corp.'s $500 million 6.875% senior notes due 2020 and its $600 million 2.75% contingent convertible senior notes due 2035.

The agency said it also assigned its B rating to Chesapeake's $500 million 5% cumulative convertible preferred stock issue while affirming its BB/B-1 corporate credit rating on the company.

The outlook is stable.

S&P said the ratings on Chesapeake reflect a highly leveraged financial profile, risks associated with an aggressive acquisitive growth strategy and exposure to volatile oil and natural gas prices, noting these concerns are only partially offset by a large and attractive reserve base with favorable growth prospects, good production visibility and competitive economics.

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