Chesapeake Borrows $1B to Pay IOUs; Bankrupt or Brilliant?

Chesapeake EnergyYesterday Chesapeake Energy, the secon largest natural gas producer in the United States (and the largest Marcellus producer, by far) issued three press releases. The first release said the company is working to obtain a five-year bank loan for a staggering $1 billion. The second two releases outlined what they will do with that money: pay off older IOUs. We also spotted commentary on the company’s $1B plan. One analyst predicts Chesapeake is heading for a pre-packaged bankruptcy, similar to what other o&g companies have done, and this massive loan/debt repayment is proof. Another analyst says Chessy CEO Doug Lawler is brilliant and that this move will strengthen Chessy’s stock in the long-term and make the company more solvent. Which one is right? They both can’t be right…

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