S&P affirms Chesapeake Energy, ups outlook to positive

Standard & Poor's said it affirmed its BB corporate credit rating on Chesapeake Energy Corp. and revised the outlook to positive from stable.

The outlook revision follows the company's announcement that it intends to issue roughly $1 billion in common equity, which will result in improved financial leverage measures, the agency noted.

While S&P said it considers Chesapeake's business risk profile satisfactory, the company's high debt leverage and acquisitive growth strategy currently limit the corporate credit rating at BB.

The announced equity issuance will improve Chesapeake's financial leverage metrics somewhat, S&P added, noting that ratings improvement depends on further deleveraging, a demonstration of a moderate financial policy and an evaluation of the company's operating results and its year-end reserve report.

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