Wednesday, September 8, 2010

Fitch Raises BP's (NYSE:BP) Rating Up Three Notches

After gaining control of the oil spill in the Gulf of Mexico, Fitch has raised the credit rating of BP (NYSE:BP) up three notches.

Both the senior unsecured rating and long-term issuer default rating were raised from BBB to A, said Fitch in a statement. They also said their outlook on the oil giant is stable.

Fitch said, their increase of the ratings and outlook “reflect an end to the threat of leaks from the Macondo well." They added it “also reflects both the improved visibility of potential liability scenarios” and “substantial progress that BP has made to date in building up liquidity to address potential financial payments.”

In the midst of the oil spill, on June 15, Fitch has slashed BP's rating by six levels to BBB. That's only two levels above junk. That was related to the uncertainty of the costs and level of debt that may have had to incur in order to pay for the accident.

While BP does have credit available in case of emergencies, they've chosen to primarily raise funds by divesting of assets, which also helps strengthen the credit outlook for the company now that the well has been plugged.

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