This is what the energy bust looks like

Shares of Chesapeake Energy drop 40% on bankruptcy fears

Chesapeake Energy was once everyone's favourite natural gas driller but shares dropped 40% before being halted on a report that the company has hired a restructuring law firm.

Before today, the company had fallen 85% in the past year.

Company bonds due in March were trading at 95-cents but plunged to 74.5 cents on the news. Chesapeake has $9.8 billion in debt outstanding.

Commodity market high yield bonds are blowing up. That's the story, not the slowdown in China.

Two years ago, the market would lend money to anything. In April 2014 Chesapeake borrowed $1.5B with a 4.87% yield for 8 years.

In September, the company had 5,000 employees; almost all of them in the United States.

Billionaire Carl Ichan owns 11% of the company, which he purchased at an average of $16/share.