Fitch downgrades Anadarko, Kerr-McGee

Fitch Ratings said it downgraded Anadarko Petroleum Corp.'s issuer default, senior unsecured debt and bank loan ratings to BBB- from BBB, preferred stock to BB+ from BBB- and commercial paper rating to F3 from F2 and the issuer default and senior unsecured ratings of Kerr-McGee Corp. to BBB- from BBB.

The outlook was changed to stable from negative.

The agency said the downgrades are a result of the change in Anadarko's strategy to reduce its debt load associated with the 2006 all-cash acquisitions of Kerr-McGee and Western Gas Resources. While the debt reduction amount remains the same, Anadarko now intends to decrease its leverage primarily through asset sales rather than through a mix of asset sales and equity issuance. As a result, Fitch said it is appropriate to downgrade Anadarko's ratings at this time as the debt relative to reserves is simply too high for the BBB level and likely will be so for the foreseeable future.

The stable outlook incorporates Fitch's expectations that all announced asset sales will close and that remaining asset sales occur in a timely fashion and within net proceed expectations and that debt will continue to decrease beyond the $12 billion level in 2008.

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