Chesapeake Gets Distress Signal From Credit Swaps Market: Chart

In the credit-default swaps market, the cost of insuring against a default by Chesapeake Energy Corp. for six months has become more expensive than it is for five years, according to data from S&P Capital IQ. This so-called inverted curve is another sign of stress for the natural gas producer, which has $500 million of senior unsecured bonds maturing on March 15. Chesapeake’s debt and equity sold off significantly this week on concerns over its worsening liquidity and its ability to manage nearly $10 billion of obligations. The company said in a Monday statement that it’s seeking to “strengthen its balance sheet” and “currently has no plans to pursue bankruptcy.”

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