Moody's may drop Anadarko

Moody's Investors Service said it placed under review for downgrade Anadarko Petroleum Corp.'s Baa2 long-term debt and Prime-2 commercial paper ratings.

Securities under review include the bonds, debentures, preferred stock (rated Ba1) and shelf registration of the company and its guaranteed subsidiaries, the agency said, adding that the ratings review is prompted by the company's shift in its de-leveraging strategy to focus mainly on asset sales as a source of debt reduction, following its $22.6 billion acquisitions of Kerr-McGee and Western Gas Resources earlier in 2006.

Post-acquisition in August, Anadarko indicated it would seek to reduce leverage via a combination of some $15 billion in proceeds from asset sales and new equity issuance, Moody's said, adding that management more recently announced that it expected property sales would be the primary means of reducing debt in 2007, citing portfolio benefits, expected proceeds in the range of $11 billion to $15 billion after-tax and a targeted debt balance of $12 billion or lower (unadjusted) by the end of 2007.

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