Shares of Chesapeake Energy (NYSE: CHK) are down 19.9% at 1:05 p.m. EDT on April 27, following a note from Moody's Corporation after market close on April 24, downgrading the troubled oil producer's senior unsecured debt. Moody's lowered the rating on Chesapeake's senior unsecured notes to "C," citing the company's "untenable capital structure" and the ongoing oil crash as increasing the likelihood that Chesapeake would default on its debt.
Moody's, one of the major ratings agencies, gives a "C" rating to debt that's on the cusp of default, with the next step down to "D" reserved for bonds that are already in default. Today's big sell-off looks to be a wake-up call for many people who've bought Chesapeake stock recently on the expectations that the company could somehow avoid bankruptcy.
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Source: Motley Fool
(April 27, 2020 - 1:51 PM EDT)
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