Moodys Downgrades Halliburton/Baker Hughes Debt Post-Failed-Merger

Moodys Ratings ScaleEver hear the phrase, “Better to try and fail than never to try at all.” That’s actually the name of a poem from William O’Brien (dead poet, read his famous poem here). Contrary to the wisdom of O’Brien’s poem, in some cases it may be better to never have tried in the first place. At least that’s what Halliburton and Baker Hughes may be thinking about their failed attempt to merge (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). Halliburton ended up having to pay Baker Hughes a $3.5 billion break-up fee (see The Road Ahead for Baker Hughes – Post Halliburton Deal). Ouch. But that’s not all. Last week Moody’s Investors Service downgraded the debt for both Halliburton and Baker Hughes–from A2 to Baa1. Why? In part because of the failed merger deal. That’s what Moody’s says. What does the credit downgrade mean? It means their outstanding debt is harder to buy and sell, affecting $12.8 billion of debt for Halliburton and $3.9 billion of debt for Baker Hughes. It also means should either company want to borrow more money, the cost will be higher to do so…

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