Wednesday, July 21, 2010

Apache (NYSE:APA) Placed on Review after BP (NYSE:BP) Acquisitions

Apache Corp. (NYSE:APA) was placed on review by Fitch Ratings after their announcement of intent to acquire assets of BP (NYSE:BP) in Egypt and North America.

The total amount to be paid by Apache for both natural gas and oil fields held by BP is $7 billion. Capital will be raised by Apache via selling common shares in the company.

To be placed on review in this case means for the purpose of downgrading the company.

After the deal, the amount of leverage (aside from selling stock) will grow significantly, and could result in Apache's issuer default rating to drop from A- to BBB+.

"If Apache were to be downgraded, it would be no more than one notch," said Moody's in a statement.

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