Marathon (NYSE:MRO) had its long-term Issuer Default Rating maintained and affirmed by Fitch Ratings, keeping it at 'BBB+' and its short-term IDR and commercial paper were kept at "F2".
Here are the data on Fitch's Marathon ratings: - IDR 'BBB+'; - Senior unsecured credit facility 'BBB+'; - Senior unsecured notes 'BBB+'; - Industrial revenue bonds 'BBB+'; - Commercial paper 'F2'; - Short-term IDR 'F2'.
In a press release, Fitch said, "Approximately $7.9 billion in debt is affected by this ratings action. Marathon's ratings are supported by the company's high liquids exposure in the upstream (>60%); strong downstream presence in the Midwest including a high quality portfolio of midstream transportation and storage assets; and adequate near-term liquidity, generated in part by the completion of its asset sale program, including its 20% stake in block 32 Angola in the first quarter. Key credit concerns center on the potential for high future capex to jump start the growth of the upstream, especially following recent asset sales; the risk of M&A or divestments to change the asset footprint of the company; and the potential impacts of a longer-term moratorium in the deepwater Gulf of Mexico, where Marathon has a modest but growing presence."
Fitch added that under their current commodity price assumptions, Marathon should have a "modestly free cash flow negative in 2010."
Any shortfalls in near term funding should be able to be handled by current cash balances, as Fitch doesn't believe Marathon will increase their debt levels in any significant manner.
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