Occidental Petroleum likely will receive a downgraded investment rating if it wins the bidding war against the much larger Chevron to acquire Anadarko Petroleum,
- Moody’s Investors Service (Moody’s) placed all ratings of Occidental Petroleum Corporation (OXY) under review for downgrade, including its A3 senior unsecured debt rating and its P-2 commercial paper rating.
These rating actions follow today’s announcement that OXY has proposed a $76 per share acquisition of Anadarko Petroleum Corporation (APC, Ba1 review up), totaling approximately $38 billion in stock and cash. OXY has proposed issuing 0.6094 new shares and $38.00 cash for each share of Anadarko, resulting in overall consideration that is 50% equity and 50% cash. The transaction value is approximately $57 billion, consolidated for Anadarko’s debt and the debt of Western Midstream Operating (Western, Ba1 review up). Should OXY’s bid for Anadarko prove successful, a multiple notch rating downgrade should be expected. If the acquisition closes as proposed and crude oil prices remain supportive, OXY would likely emerge from the review with a weakly positioned investment grade rating.
Anadarko’s and Western’s ratings remain on review and are not affected by this action.
The following ratings were placed under review for downgrade:
Issuer: Occidental Petroleum Corporation
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