Exxon Mobil Corp., (IW 500/1) the oil giant at risk of losing its top-notch credit rating, is selling bonds as it seeks funds for future acquisitions and other business opportunities, the company said.

The world’s largest oil company may sell debt in as many as eight parts and is offering above average yields, according to a person with knowledge of the matter. The offering comes after Moody’s Investors Service warned last week that the oil-market collapse imperils cash flow needed to cover debt payments and investment in new discoveries at Exxon and cut its outlook to negative from stable.

"In the grand scheme of things, their overall yields will be low, and starting to build a bigger war chest makes a lot of sense,” said Peter Tchir, head of macro strategy at Brean Capital LLC in New York. “Yes, they are paying up, but the energy space has been so volatile, they should to ensure the deal gets done, and buyers are happy”.

The longest portion of the offer is a 30-year bond yielding up to 155 basis points more than comparable government debt, said the person, who asked not to be identified because the deal is private. While that’s lower than an originally offered premium of as much as 180 basis points, it’s 11 basis points more than the average yield on corporate debt of similar maturity and rating, according to Bank of America Merrill Lynch Indexes.

Exxon’s offer for a 10-year note of 135 basis points more than comparable Treasuries represents a 53 basis-point premium to comparable debt, Bank of America Merrill Lynch data shows.

‘Terrible Industry’

Standard & Poor’s placed the company on credit watch with negative implications on Feb. 2, saying that Exxon’s credit measures will probably remain weak through 2018.

"Exxon is a great company in what is perceived to be a terrible industry right now," said Andrew Brenner, head of international fixed income at National Alliance Capital Markets in New York. "If energy was not in the headlines over the last year, the 30-year would probably come to market at somewhere around 125 basis points."

‘Kid in a Candy Store’

That Exxon is in the process of being downgraded isn’t weighing on the price as much as the risk associated with the energy industry, Brenner said, since cuts by Moody’s and S&P are lagging indicators.

Crude is down about 10% this year in New York on speculation a worldwide glut will be prolonged amid increased exports from Iran. It advanced on February 29 as Saudi Arabia said it would work with other producers to curb market fluctuations.

"If you are Exxon, you have to be looking around at all of the wreckage in the energy sector these days and feel like a kid in a candy store," said Spencer Cutter, an analyst at Bloomberg Intelligence. "I am not sure I would say that this debt sale is a sign of health, but more likely of building a capital stockpile to be able to take advantage of the market, invest in assets while they are cheap."

As the company likely doesn’t need cash for anything in the near term, the debt offer may be a sign that Exxon intends to "start picking up great assets at fire-sale prices" and "take advantage of the downturn and start shopping," Cutter said. Though most investors will look at the deal as if the company has already been downgraded, he said, this probably won’t have a great impact on pricing as Exxon is still one of the strongest corporate credits in the world.in danger.