Debt Deluge at Anadarko
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Updated from 2:25 p.m. EDT
The $24 billion financing package Anadarko Petroleum(APC Quote) scored for this morning's acquisition spree isn't for the faint of heart.
On Friday, the company unveiled plans to purchase Kerr-McGee(KMG Quote) and Western Gas Resources(WGR Quote) in two separate transactions that total $23.3 billion. Currently, Anadarko plans to pay for the acquisitions with a 364-day credit facility provided by its two advisers, UBS and Credit Suisse, and a third party, Citigroup.
Credit market sources say the loan probably will be short-term financing, requiring Anadarko, a $20.5 billion market-cap oil and gas driller based in Woodlands, Texas, to replace it during the next year with syndicated bank debt or bonds, or both. Such a structure isn't unusual for an investment grade company doing a deal of this size. ...
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