Standard & Poor’s Ratings Services dropped its long-term corporate credit rating on British Petroleum (NYSE: BP) from ‘AA’ to ‘AA-‘. The short-term corporate credit rating remains ‘A-1+’.
“The downgrade reflects our opinion on the significant operational challenges that U.K.-headquartered oil major BP continues to face to stem or contain the leak from one of its wells in the Gulf of Mexico,” said Standard & Poor Credit Analyst Simon Redmond.
S&P Added, “Our rating action reflects, in particular, our view on: the costs to BP in 2010 for capping the well and cleaning up; the level of any longer-term compensation, litigation, or fines; the potential for increased regulation and scrutiny of the U.S. offshore industry; and the impact on BP’s reputation and brand. While the scope and consequences of the spill are still uncertain, this event is, in our opinion, not consistent with the scenario we had factored into the previous ‘AA’ rating, hence the downgrade.”
Shares of BP traded down 5.37% on Friday, hitting $37.16.
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