Friday, December 18, 2015

"Chesapeake Energy Faces Bankruptcy if Noteholders Don’t Cooperate" (CHK)

The stock is up a quarter 27 cents to $3.99 but had fallen so far that that's a 7.2% move.
If the exchange does go through the stock probably trades up to $6.00 but that is a dangerous little game to play without inside knowledge.

From Marcellus Drilling News:
It appears that Chesapeake Energy is having trouble convincing its noteholders with notes due in 2017/2018 to exchange those notes (IOUs), which are unsecured (no guarantees they get paid if the company goes belly up) for new secured, second-lien notes due in 2022. We told you two weeks ago that Chesapeake had embarked on a program to swap out various classes of notes, a plan to delay repaying outstanding debt (see Chesapeake Energy Floats Plan to Exchange $1.5B Worth of IOUs). Somewhere between 10%-28% of the outstanding $1.7 billion in 2017/2018 notes–those notes closest to maturity–have signed on to the plan. It’s not enough. Chesapeake has a gun to the head of its noteholders, a “prisoners’ dilemma.” If a significant number don’t go for the plan, it’s a near-certainty the company will be forced to file for bankruptcy according to finance experts, and those noteholders will get nothing because their notes are unsecured....MORE
Natural Gas: Chesapeake Energy Stock Down 10% as Debt Exchange Shows How Low On the Totem Pole Equity Actually Is (CHK)
Apocalyptic Warning On Energy Company Defaults
"Thirty-six North American oil and gas producers filed Chapter 11 bankruptcies this year"
Chesapeake Is Trading Like A Bankruptcy (CHK)
Rolling Back to 2002 Prices: "Chesapeake Energy: It’s the Debt Load, Silly" (CHK)

And many, many more--after all we're talking the #2 producer in the country here.