Occidental (Oxy) was upgraded to Ba1 from Ba2 by Moody’s, reflecting its strong business profile, improved governance and credit metrics as its earnings increased and debt reduced significantly in 2021. Oxy reduced balance sheet debt by $6.7bn in 2021, funded by an asset sales program and generated $1.9bn in free cash flow (FCF) in Q4 2021. It expects to reduce net debt to below $25bn by the end of Q1 2022 from almost $27bn currently. Regarding its earnings, Moody’s notes that Oxy is currently unhedged on its oil or gas production, thus giving it full exposure to potential higher oil prices in 2022, but also risk the impact of prices falling. Further, it has a resilient asset base benefitting from large reserves.

Oxy’s dollar bonds were trading stable with its 3% 2027s at 98.69, yielding 3.29%.

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