Occidental (Oxy) was upgraded to BB+ from BB by S&P. Occidental’s repayment of debt over the past two years has helped its profile and the company would continue to keep debt reduction as a priority in 2022. In 2021, Oxy repaid over $6bn in debt principal and also benefitted from a rally in oil and gas prices that have favorably impacted its leverage metrics. S&P expects its average funds from operations-to-debt forecast of 25%-30% along with debt to EBITDA in the range of 2.5-3x over the next two years. Additionally, Oxy’s intent to achieve a net debt of ~$25bn or less in the near term will help lower interest expense and is “critical as the company seeks to regain investment-grade credit ratings”. Debt repayments would be met out of excess cash flows after its Ghana asset sale met the lower bound of its divestiture target of $10-15bn.

Oxy’s dollar bonds were stable with its 8.45% 2029s at 119.75, yielding 5.08%

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