BP Plc’s settlement of the Deepwater Horizon blowout and its cost reduction efforts should support its credit ratios to the end of 2016, ratings agency Standard & Poor’s said, revising its outlook on the oil and gas major to stable from negative.
S&P affirmed its highest ‘A-1’ rating on BP’s short-term credit and ‘A’ on its long-term issue.
S&P’s ‘A’ rating considers a company’s ability to meet financial commitments as strong, but leaves room for adverse events or changes in economic conditions.
“The stable outlook reflects our view that BP’s credit metrics in 2015-2016 will be supported by its divestments and reduced capital expenditure, which should largely cover the negative discretionary cash flows we forecast,” S&P analysts said. (http://bit.ly/1LFf5PE)
S&P said BP’s $18.7 billion settlement of federal, state and local claims stemming from the Deepwater Horizon accident in 2010 reduces the uncertainty around the upper limit of possible claims.
