Moody's lifts Kerr-McGee notes from junk

Moody's Investors Service said it upgraded five series of notes and debentures issued by Kerr-McGee Corp. to Baa2 from Ba2 following the provision of an unconditional guarantee of those securities by Anadarko Petroleum Corp. The unconditional parent guarantee was brought about through amendments to the indentures governing the securities, and Kerr-McGee, as a wholly owned and guaranteed subsidiary of Anadarko, will no longer file or provide audited financial statements.

Moody's noted that the indentures contain provisions for the possible removal of the parent guarantee in the event that Kerr-McGee were required to resume filing separate financial statements in the future. While the agency views that as an unlikely scenario, it said it would expect to review the Kerr-McGee securities for downgrade if the parent guarantee were removed.

Anadarko's outlook is negative, reflecting the high level of debt it incurred when it acquired Kerr-McGee in August and the agency's view that post-acquisition leverage could remain elevated even after the company proceeds with its deleveraging strategy.

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