More bad news for Chesapeake Energy: Standard & Poor’s has downgraded the corporate credit rating of the Oklahoma City-based natural gas giant and its subsidiaries.
This afternoon, S&P downgraded Chesapeake to BB from BB+.
Chesapeake’s board is reviewing financing arrangements between CEO Aubrey McClendon and third parties tied to a controversial corporate perk. Today, the company and McClendon announced they were ending the Founder Well Participation Program.
From S&P credit analyst Scott Sprinzen:
“The downgrade and CreditWatch placement reflect our view that recent revelations about personal transactions undertaken by Chesapeake’s CEO relating to the company’s unusual Founder Well Participation Program underscore shortcomings in Chesapeake Energy Corp.’s corporate governance practices.”