Moody's may upgrade Westport

Moody's Investors Service said it affirmed the debt ratings of Kerr-McGee Corp. (Baa3 senior unsecured) with a negative outlook and also placed Westport Resources Corp.'s Ba2 senior implied and Ba3 senior subordinated ratings under review for upgrade following the announcement that each companies' board of directors has unanimously approved a merger.

The all stock transaction is valued at about $3.4 billion, including outstanding Westport debt of about $900 million, and will result in Kerr-McGee issuing approximately 49.4 million new shares to Westport's shareholders.

Ratings placed under review for upgrade include Westport Resources' Ba2 senior implied rating, Ba2 issuer rating, Ba3 senior subordinated notes, B1 convertible preferred stock (which will be withdrawn if these securities are redeemed), and its shelf registration for senior unsecured securities at prospective Ba2, subordinated securities at prospective Ba3, and preferred stock at prospective B1.

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