Tuesday, July 6, 2010

BP's (NYSE:BP) Loan for Oil Spill Reaches over $9 Billion

The backup loan for BP (NYSE:BP), which is being provided by a group of banks, has now reached over $9 billion. The purpose of the loan is to provide support and liquidity to the company against potential claims at strategic times.

Approximately nine banks have entered into agreement with BP to lend them close to $1 billion each.

An unnamed person familiar with the matter said, "BP is calling on its relationship banks to provide liquidity and more are likely to join the group."

Most of the banks providing the loans are based outside the US, but one American-based bank mentioned among those possibly part of the deal was Citigroup (NYSE:C).

Terms of the loan are a maturity of one year with an option of a one-year extension.

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