S&P: Devon unaffected

Standard & Poor's said Friday that Devon Energy Corp.'s (BBB+/stable/A-2) announcement that it will double its dividend will not affect the ratings or outlook on the company.

S&P said it expects that the company will continue to build cash in advance of its significant debt maturities in 2005 and 2006 and that the increased dividend (total annualized dividend is now $93 million at the new rate) should not impair the company's ability to meet its deleveraging targets.

Should equity-friendly activities, such as dividend increases or share repurchases, be pursued to the extent that the company is challenged to repay a large majority of these maturities through internally generated cash, S&P said it would likely lower its rating and/or outlook on Devon.

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