Fitch puts Callon on positive watch

Fitch Ratings said it placed Callon Petroleum Co.'s B+ long-term issuer default rating and all issue-level ratings on rating watch positive.

The RWP follows the announcement that APA Corp., which is rated BBB-, agreed to acquire Callon in an all-stock acquisition valued at about $4.5 billion, including around $1.9 billion of net debt, Fitch said.

“APA expects to refinance all of Callon's existing debt with pre-payable term loans on or shortly after close, which provides a path toward deleveraging in the near term,” the agency said in a statement.

Fitch said it plans to resolve the RWP at close which is expected in 2Q24. “Although unlikely, the closing of the transaction and resolution of the RWP could take longer than six months.”

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