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Fitch rates Kerr-McGee notes
Fitch Ratings said it has assigned a BBB rating to the proposed $600 million 20-year senior unsecured note offering from Kerr-McGee. The negative outlook will remain unchanged.
The proceeds from the offering will be used to redeem all of the outstanding 8.25% senior subordinated notes due 2011 of Westport Resources.
Fitch said the rating is based on the company's 1.3 billion barrel of oil equivalent in reserves, its considerable titanium dioxide operations and its credit profile, which has benefited greatly from strong commodity prices.
The negative outlook is due to Kerr-McGee's weak debt per proved developed producing barrel of oil equivalent, which pro forma for the Westport Resources transaction will remain near $5.00. Also, Kerr-McGee will maintain a dividend, requiring annual payments in excess of $250 million subsequent to closing of the Westport Resources transaction.
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