Occidental (Oxy) was upgraded to BBB- from BB+ by Fitch citing improvement in midcycle credit metrics. Thus Oxy is now rated investment grade by Fitch. Oxy’s incremental de-leveraging alongside improvement in midcycle earnings in the chemicals and midstream segments contributed to the upgrade. Redemptions of bonds and preferred stock have majorly helped reduce leverage. Fitch notes that since the completion of its Anadarko acquisition in 2019, Oxy has retired over $26bn in debt, including $10.5bn in 2022. New projects and contracts are said to help its chemicals and midstream & marketing unit. Regarding financials, Oxy’s EBITDA leverage is now only at 1.1x and free cash flows were at a record high of over $11bn. Its near-term debt maturity wall is expected to be addressed “comfortably” as per Fitch.
Its bonds were trading stead with its 7.15% 2028s at 105.3, yielding 5.92%.
