BP Capital Markets PLC, the funding unit of BP Plc (NYSE:BP), is close to issuing about $3 billion in bonds, led by Citigroup (NYSE:C), BNP Paribas, Barclays Capital (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS) and Mizuho Securities USA Inc.
The bonds will be 5- and 10-year bonds sold in U.S. dollars.
Pricing of the bonds will be somewhere in the low to mid 200 basis points range over Treasuries, with tranches split close to equal.
BP PLC, the parent company, will be guaranteeing the bonds, which are projected to be rated A2 by Moody's Investors Service (NYSE:MC) and A by Standard & Poor's.
In a filing with the Securities and Exchange Commission BP said they will use the capital to pay for existing debt and other general corporate purposes.
A spokesman for BP said the bond issuance isn't specifically related to the BP oil spill and is part of normal financial management of the company.
Showing posts with label BP Debt. Show all posts
Showing posts with label BP Debt. Show all posts
Tuesday, September 28, 2010
Monday, September 27, 2010
Moody's (NYSE:MCO) Says BP (NYSE:BP) Credit Swaps Trading at Investment Grade
According to the market research arm of Moody’s Investors Service (NYSE:MCO), BP (NYSE:BP) credit default swaps are trading at investment-grade levels.
BP debt protected by credit default for a five year period dropped 3.4 basis points to 188.5 shortly after 11:00 AM EDT in New York, according to CMA, a provider of data for the industry. CMA data reveal the CDS contracts have dropped 681 basis points since June 16.
Trading levels imply the company is trading at a rating of Baa3, while Moody's has a rating of A2 on the debt, four levels about the implied rating.
Baa3 is the lowest rung of the investment-grade rating system of Moody's.
BP debt protected by credit default for a five year period dropped 3.4 basis points to 188.5 shortly after 11:00 AM EDT in New York, according to CMA, a provider of data for the industry. CMA data reveal the CDS contracts have dropped 681 basis points since June 16.
Trading levels imply the company is trading at a rating of Baa3, while Moody's has a rating of A2 on the debt, four levels about the implied rating.
Baa3 is the lowest rung of the investment-grade rating system of Moody's.
Friday, August 27, 2010
BP (NYSE:BP) Being Shorted by Bill Ackman
Bill Ackman, manager of the Pershing Square Capital Management fund, said he's shorting the debt of BP (NYSE:BP) using credit default swaps.
According to Ackman, he believes the damage BP has done to its reputation in the U.S. keeps them from being able to "operate effectively" in the U.S., where they have their largest presence.
Ackman also said acquiring the credit default swaps was cheap, especially because of the huge legal liabilities they face, and the uncertainty as to how much they'll end up costing the oil giant.
Credit default swaps are a type of insurance used to protect a company against defaulting on its debt.
According to Ackman, he believes the damage BP has done to its reputation in the U.S. keeps them from being able to "operate effectively" in the U.S., where they have their largest presence.
Ackman also said acquiring the credit default swaps was cheap, especially because of the huge legal liabilities they face, and the uncertainty as to how much they'll end up costing the oil giant.
Credit default swaps are a type of insurance used to protect a company against defaulting on its debt.
Thursday, July 15, 2010
BP (NYSE:BP) Stocks Price Dropping Again
After a five day winning streak, BP (NYSE:BP) stocks price is dropping again. The decline is said to be because of the delayed testing that would tell if the sealing cap that has been installed is successful.
BP's shares fell 2.3 percent, while their American depository shares saw a 2.1 percent plummet to $36.12. That's its second day straight being in the red. Even after the decline seen on Tuesday and Wednesday, for the week the stock is up 6 percent.
After hitting a 14 year low last month, they are still up 35 percent. While their shares are still down 40 percent from before the explosion and sinking of the Deepwater Horizon. The cost to insure BP debt has increased, from $321,000 as of Tuesdays close to $355,000 annually.
BP's senior vice president, Kent Wells said they have temporarily stopped drilling of the relief well, which will set back the completion by a "couple days."
BP's shares fell 2.3 percent, while their American depository shares saw a 2.1 percent plummet to $36.12. That's its second day straight being in the red. Even after the decline seen on Tuesday and Wednesday, for the week the stock is up 6 percent.
After hitting a 14 year low last month, they are still up 35 percent. While their shares are still down 40 percent from before the explosion and sinking of the Deepwater Horizon. The cost to insure BP debt has increased, from $321,000 as of Tuesdays close to $355,000 annually.
BP's senior vice president, Kent Wells said they have temporarily stopped drilling of the relief well, which will set back the completion by a "couple days."
Tuesday, June 15, 2010
BP (NYSE:BP) Downgraded from AA to BBB by Fitch Ratings
The downgrading of BP (NYSE:BP) by Fitch Ratings to BBB, ultimately is a result of the pressure to increase the liability of BP in the Gulf oil spill, but also the pressure to pay up earlier.
Whether or not the estimates of U.S. governments scientists is accurate or not, the numbers of between 20,000 to 40,000 barrels a day spilling into the Gulf has increased the potential payout by BP to a much higher amount than originally thought.
Fitch looks at the loss of financial flexibility being a big issue for the company, based largely on the assumption BP will cave in and put billions into an escrow account which would then be used to pay out claims; at least hopefully that's what it'll be used for.
Once the government get access to $20 billion, if that's the amount and BP agrees to do it, they can start paying out all sorts of spurious claims which at best, may have a tenuous connection to the oil spill.
An immediate fallout will also be the increased cause of debt for the company, making it more costly to do business.
Whether or not the estimates of U.S. governments scientists is accurate or not, the numbers of between 20,000 to 40,000 barrels a day spilling into the Gulf has increased the potential payout by BP to a much higher amount than originally thought.
Fitch looks at the loss of financial flexibility being a big issue for the company, based largely on the assumption BP will cave in and put billions into an escrow account which would then be used to pay out claims; at least hopefully that's what it'll be used for.
Once the government get access to $20 billion, if that's the amount and BP agrees to do it, they can start paying out all sorts of spurious claims which at best, may have a tenuous connection to the oil spill.
An immediate fallout will also be the increased cause of debt for the company, making it more costly to do business.
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