S&P cuts Occidental

S&P said it lowered its ratings on Occidental Petroleum Corp., including the issuer credit rating and unsecured issue-level ratings, to BB- from BB+. The 3 recovery rating (50%-70% recovery) on the company's unsecured debt remains unchanged, though the agency revised the rounded recovery estimate to 55% from 50%.

“The downgrade primarily reflects OXY's highly leveraged capital structure resulting from last year's acquisition of Anadarko Petroleum, which continues to be burdensome amid an increasingly challenging industry environment. Based on our current oil and gas price assumptions, we expect average debt/EBITDA above 7x (on an adjusted basis) for the next two years, with FFO/debt below 12% during that timeframe,” S&P said in a press release.

The outlook is negative.

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