Fitch: No Rating Changes for Chevron After Revised Unocal Bid

In light of Chevron Corporation's revised bid for Unocal Corporation, Fitch Ratings will not change its debt ratings on Chevron or revise its Outlook on the company.

Fitch rates Chevron as follows:

  • Senior unsecured debt 'AA'
  • Commercial paper 'F1+';
  • Rating Outlook Stable.

The revised bid for Unocal slightly increases the offer price and it also increases the cash portion of the consideration. However, the cash portion, on a net basis, only increases by $1-1.5 billion dollars. Under the revised agreement, Chevron will pay Unocal shareholder's approximately $7.5 billion in cash and the rest in Chevron stock. Chevron will easily be able to pay this out of cash balances as it had nearly $12 billion in cash and marketable securities at the end of the first quarter.

While the Unocal's board of directors has recommended that Unocal shareholders vote in favor of adopting the revised Chevron merger agreement at the special meeting of Unocal shareholders scheduled for Aug. 10, 2005, Unocal's debt ratings remain on Rating Watch Evolving pending the outcome of that vote.

Fitch rates Unocal as follows:

  • Senior unsecured debt 'BBB+';
  • Trust preferred 'BBB';
  • Commercial paper 'F2'.

Fitch's rating definitions are available on the agency's public web site, ''. Published ratings, criteria and methodologies and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days. The issuer did not participate in the rating process other than through the medium of its public disclosure.