Moody’s cuts Occidental Petroleum to Baa3

Moody's Investors Service said it cut Occidental Petroleum Corp.’s senior unsecured debt rating to Baa3 from A3, citing the company’s proposed merger with Anadarko Petroleum Corp.

“OXY's acquisition of Anadarko is a significantly leveraging transaction, adding over $40 billion of debt to OXY's capital structure at its outset,” said Andrew Brooks, Moody's vice president., in a press release.

“While the acquisition will strengthen and diversify OXY's upstream and midstream asset base, adding further scale to its already large position in the Permian Basin, the significant increase in debt leaves the company with less flexibility to confront commodity price volatility.”

Moody’s revised Occidental’s outlook to stable from under review.

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