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Occidental Petroleum Pays a High Price for Some Breathing Room on Its Debt

DATE POSTED:June 30, 2020

Occidental Petroleum (NYSE: OXY) has been in scramble mode this year. Cratering crude oil prices upended its plan to use free cash flow and asset sales to pay down a sizable portion of the debt it took on to acquire Anadarko Petroleum last year. That left the company exploring other options to shore up its balance sheet, especially since it has a significant amount of debt maturing next year.   

The oil company successfully tapped one alternative last week. It issued $2 billion of new bonds, which will provide it with cash to repurchase a sizable portion of those maturing in 2021 and 2022. However, because of its deteriorating credit profile, it paid a steep price for this debt.

Image source: Getty Images.

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