Chevron Corp. Ratings On CreditWatch Negative On Anadarko Acquisition

  • Chevron Corp. has entered into an agreement to acquire Anadarko Petroleum Corp. for $33 billion, $50 billion including the assumption of debt, to be funded with 75% common equity and 25% cash.
  • Chevron also raised its annual share repurchase target to $5 billion per year from $4 billion.
  • Chevron plans asset sales of $15 billion to $20 billion in 2020 through 2022, on top of a planned $3 billion in 2019, to support cash flow and debt repayment
  • On April 15, 2019, S&P Global Ratings placed the 'AA' issuer credit and senior unsecured ratings on CreditWatch with negative implications, reflecting the possibility that expected debt leverage could exceed our expectations for the rating following the close of the acquisition.
  • The 'A-1+' short-term and commercial paper ratings are unchanged, and will not change if the issuer credit rating is lowered.
NEW YORK (S&P Global Ratings) April 15, 2019—S&P Global Ratings today took the rating actions listed above. The negative CreditWatch placement reflects the possibility that we could lower or affirm the 'AA' issuer credit and senior unsecured ratings on Chevron when the Anadarko acquisition closes. At this time, we expect a downgrade would not be more than one notch. We also note that a downgrade would not affect the 'A-1+' short-term and commercial paper ratings.


The negative CreditWatch listing reflects the potential for an affirmation or a downgrade following the close of its acquisition of Anadarko. In resolving the CreditWatch placement, we will assess integration risk as well as Chevron's ability to complete asset sales, repay debt, and lower debt leverage on a timely basis. For the current rating we target an average FFO/debt comfortably above 60%. We expect to resolve the CreditWatch around the close of the acquisition.
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