Cash-strapped U.S. oil and gas companies, including No. 2 natural gas producer Chesapeake Energy Corp, are expected to cut their debt piles this year as a long-awaited rise in the price of oil persuades investors to swap bonds for stock. Exchanging the debt of financially distressed firms for their equity can be a high-risk maneuver because shareholders are usually wiped out in the event of bankruptcy. Also, a company’s share price tends to drop in the wake of these deals because they are usually agreed upon at a discount and the firms issue more shares for the swaps, diminishing the value of existing stock. But investors doing these swaps in the U.S. energy market do not have an irrational appetite for destruction. Instead, they are often calling the shots, leaning on the desperation of companies to cut their debt, loaded up when oil was at $100 a barrel, as […]