Chesapeake Energy (CHK) is continuing to look for ways to manage its hefty debt burden.
On Monday, The Wall Street Journal reported that Chesapeake is working with Evercore Partners to look for ways to ease its $11.6 billion debt burden as commodity prices continue their decline. Chesapeake did not immediately respond to confirm and comment on the Journal's report and Evercore declined to comment.
Concerns about Chesapeake Energy's debt load are nothing new. Earlier this month, the company offered to exchange $1.5 billion of its existing unsecured notes for senior secured second-lien notes. Special preference was given to holders of bonds maturing in 2017 and 2018 so that the company can alleviate itself of some of its near-term obligations.
Ratings agencies took a less sanguine outlook on the proposed swap as Moody's lowered its rating on all of Chesapeake Energy's debt to B2 from Ba2, which represent a three notch downgrade and has the company debt further into junk territory. The notes themselves were awarded a rating of B1.
Furthermore, shares of Chesapeake Energy are down 80% for the year and are trading around $4. Activist investor Carl Icahn maintains an 11% equity stake in Chesapeake Energy, though he has cautioned investors against the very type of high-yield debt the company pushes.