Bloomberg News

JPMorgan Raises Chesapeake Debt Recommendation to Buy from Hold

May 03, 2012

JPMorgan Chase & Co. (JPM:US) raised its recommendation on the debt of oil and gas driller Chesapeake Energy Corp. (CHK:US) to overweight from neutral.

“We upgrade the senior notes to buy from hold based on cheap valuation,” because the company can overcome liquidity concerns, analysts at the bank led by Gregg Brody wrote in a research note dated May 2.

The cost to protect against losses on Chesapeake’s debt yesterday jumped to the highest since September 2009 as the second-largest U.S. natural-gas producer, which reported an unexpected first-quarter loss, said it may run out of money next year.

Chesapeake’s $1.3 billion of 6.775 percent senior unsecured notes due March 2019 fell 3.25 cents yesterday to 95.75 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

To contact the reporter on this story: John Parry in New York at jparry5@bloomberg.net

To contact the editor responsible for this story: Richard Bravo at rbravo5@bloomberg.net


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Companies Mentioned

  • JPM
    (JPMorgan Chase & Co)
    • $59.45 USD
    • 0.29
    • 0.49%
  • CHK
    (Chesapeake Energy Corp)
    • $27.2 USD
    • 0.22
    • 0.81%
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