We are updating our recovery analysis on U.S. midstream company Chesapeake Midstream Partners L.P. (CHKM) to reflect the recent upsizing of its revolver to $1 billion from $800 million, and the recent issuance of $750 million of senior unsecured notes. CHKM is highly dependent on the revenue it receives from its contracts with Chesapeake Energy (BB+/Stable/--), and Chesapeake Energy's operations are highly dependent on CHKM's assets for usage. Our simulated default scenario for CHKM contemplates severe distress at Chesapeake Energy. CHKM and Chesapeake Energy have long-term fixed-fee contracts, which include minimum volume usage commitments from Chesapeake Energy that account for a high proportion of CHKM's revenue. Our default scenario contemplates distress at Chesapeake Energy resulting from an extended period of...
Companies mentioned in this report are: Chesapeake Midstream Partners L.P.
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