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Chesapeake Makes Amendment to Revolving Credit Facility

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Chesapeake Energy CorporationCHK announced that it has amended its five-year, $4.0 billion revolving credit facility agreement maturing in 2019 with its bank syndicate group.

Per the amendment, the credit facility became senior secured from a senior unsecured revolving credit facility. Also the initial borrowing base was confirmed at $4.0 billion. The agreement cancelled the previous total leverage ratio financial covenant of 4.0x trailing 12-month earnings before interest, depreciation and amortization (EBITDA). However two new financial covenants were added which consists of a senior secured leverage ratio of 3.5x through 2017 and 3.0x thereafter, and an interest coverage ratio of 1.1x through the first quarter of 2017, increasing incrementally to 1.25x by the end of 2017. As of Sep 30, 2015, Chesapeake had $12.0 million in outstanding letters of credit under the facility, with the remainder of $4.0 billion still available.

Chesapeake Energy is the second-largest producer of natural gas and the twelfth-largest producer of oil and natural gas liquids in the U.S. Headquartered in Oklahoma City, the company's operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore U.S. The company also owns substantial marketing and compression businesses.

Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. The company has grown rapidly and is now the second-largest natural gas producer in the U.S. It is also the eleventh-largest producer of oil and natural gas liquids in the U.S. Chesapeake is noted for growth by acquisition. The company has also demonstrated considerable drilling prowess, capitalizing on its extensive inventory of acquired undeveloped acreage to make substantial reserve additions.

Currently, Chesapeake carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Alon USA Partners, LP ALDW , Braskem S.A. BAK and ReneSola Ltd SOL . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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CHESAPEAKE ENGY (CHK): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

ALON USA PTNRS (ALDW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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