Loans obtained by BP (NYSE:BP), worth $4.75 billion, which will be used to back the liquidity of the company, will reportedly be funded next week after the oversubscribed closing, according to bankers.
Royal Bank of Scotland (NYSE:RBS) and Societe Generale arranged a $2.25 billion loan, which was originally $2 billion. That is backed by BP crude sales from its stake in the Azeri-Chirag-Deepwater Gunashli field in Azerbaijan.
The remaining loan for $2.5 billion was arranged by BNP Paribas and Standard Chartered, and will have as collateral crude oil sales from Angola assets.
For the first two years of the five-year amortizing loans, BP will pay margins of 250 basis points (bps) over LIBOR. After that they'll increase to 300 for the third year of the loan, and for the final two years rise to 335 basis points.
The loans will mature on June 30, 2015.
Showing posts with label BP Liquidity. Show all posts
Showing posts with label BP Liquidity. Show all posts
Friday, October 22, 2010
Friday, July 30, 2010
HBSC (NYSE:HBC) Takes Lead on BP (NYSE:BP) Vietnam Asset Sale
BP (NYSE:BP) has hired HSBC Holdings Plc (NYSE:HBC) to help them sell their stake in the Nam Con Son natural-gas field in Vietnam. The value of the asset is close to $1.3 billion.
It's no secret BP is attempting to raise capital to fund existing and future liabilities connected to the Gulf oil spill, and they've very publicly let it be known the assets in Vietnam were available for acquisition.
Included in the Vietnam assets are a power station, pipeline and gas field.
BP recently upped the amount of assets they want to divest of to raise capital from about $10 billion to $30 billion. They garnered $7 billion of that recently with the sell of assets to Apache Corp (NYSE:APA), which included Egyptian and North American projects.
South American assets in Venezuela, Colombia and Argentina may be next on the block. Russia has already expressed some interest in the Venezuelan holdings.
Barclays Plc (NYSE:BCS) was recently hired to help sell the assets BP holds in Columbia.
India's giant exploration company, Oil & Natural Gas Corp., may team up with Vietnam Oil & Gas Group to acquire the Nam Con Son field. They already hold a 45 percent stake in the project.
It's no secret BP is attempting to raise capital to fund existing and future liabilities connected to the Gulf oil spill, and they've very publicly let it be known the assets in Vietnam were available for acquisition.
Included in the Vietnam assets are a power station, pipeline and gas field.
BP recently upped the amount of assets they want to divest of to raise capital from about $10 billion to $30 billion. They garnered $7 billion of that recently with the sell of assets to Apache Corp (NYSE:APA), which included Egyptian and North American projects.
South American assets in Venezuela, Colombia and Argentina may be next on the block. Russia has already expressed some interest in the Venezuelan holdings.
Barclays Plc (NYSE:BCS) was recently hired to help sell the assets BP holds in Columbia.
India's giant exploration company, Oil & Natural Gas Corp., may team up with Vietnam Oil & Gas Group to acquire the Nam Con Son field. They already hold a 45 percent stake in the project.
Wednesday, July 28, 2010
BP's (NYSE:BP) Bonds Up as Market Likes Strategy to Raise Capital
The market liked what they heard from BP (NYSE:BP) on plans to raise capital to deal with the oil spill by selling billions in assets, rather than primarily go the debt route, although they have billions in credit lined up from about a dozen banks to go that route if they have to.
As a result, bonds from BP have went up for two days in a row while the cost of credit default swaps fell, which is insurance used to protect investors against default by a company.
This of course precludes bonds, which are debt after all.
MarketAxess reports that traders were primarily targeting short term bonds of BP, which they pushed up by 3/4 point to a 4.994 percent yield. In comparison to Treasurys, that's 400 basis points above their yield.
Notes due November 2013 which stood at 5.25 percent were the most active.
The progress of BP in stopping the oil from flowing into the Gulf, along with being close to permanently plugging the well has generated optimism.
Fixed-income managers said BP is still a very risky company, even though things have the appearance of settling down.
It won't really be until a firmer grip on overall liabilities emerge, that a more accurate picture of the health of the company in the years ahead will be really known.
And all those assets they're being forced to sell, will also be lost revenue and earnings.
So while a leaner BP with new leadership sounds more attractive than what they've been, it presents a entire new set of problems that can't be dismissed out of hand.
As a result, bonds from BP have went up for two days in a row while the cost of credit default swaps fell, which is insurance used to protect investors against default by a company.
This of course precludes bonds, which are debt after all.
MarketAxess reports that traders were primarily targeting short term bonds of BP, which they pushed up by 3/4 point to a 4.994 percent yield. In comparison to Treasurys, that's 400 basis points above their yield.
Notes due November 2013 which stood at 5.25 percent were the most active.
The progress of BP in stopping the oil from flowing into the Gulf, along with being close to permanently plugging the well has generated optimism.
Fixed-income managers said BP is still a very risky company, even though things have the appearance of settling down.
It won't really be until a firmer grip on overall liabilities emerge, that a more accurate picture of the health of the company in the years ahead will be really known.
And all those assets they're being forced to sell, will also be lost revenue and earnings.
So while a leaner BP with new leadership sounds more attractive than what they've been, it presents a entire new set of problems that can't be dismissed out of hand.
Friday, July 23, 2010
BP's (NYSE:BP) Alaskan Assets May Be On the Block Again
After some movement on other assets BP (NYSE:BP) is selling to raise capital to fund its liabilities in the Macondo Well oil spill, reports are they may be opening up talks again concerning assets it holds in Alaska, including the Prudhoe Bay oil field, which they hold a 26 percent stake in.
BP couldn't get the deal done with Apache (NYSE:APA), which seemingly wasn't willing to pay the price BP wanted, with approximately $1 billion separating the parties. BP had asked for about $10 billion and Apache was holding strong at close to $9 billion.
They did sell other assets to Apache earlier in the week for $7 billion, which were located in Egypt and North America.
This week BP also let it be known assets in Vietnam and Colombia were also for sale, which has generated significant interest, especially the Vietnam assets.
A number of government-owned oil companies are always looking out for energy assets to acquire, so BP will get a good price for those the choose to sell, even though it is known they need the cash badly.
Prudhoe Bay also had the sticking point of the right of first refusal from existing partners in the project, which include oil giants Exxon Mobil Corp. (NYSE:XOM), ConocoPhillips (NYSE:COP) and Chevron Corp. (NYSE:CVX). Exxon and Conoco have equal stakes of 36 percent and Chevron a small 2 percent stake.
BP couldn't get the deal done with Apache (NYSE:APA), which seemingly wasn't willing to pay the price BP wanted, with approximately $1 billion separating the parties. BP had asked for about $10 billion and Apache was holding strong at close to $9 billion.
They did sell other assets to Apache earlier in the week for $7 billion, which were located in Egypt and North America.
This week BP also let it be known assets in Vietnam and Colombia were also for sale, which has generated significant interest, especially the Vietnam assets.
A number of government-owned oil companies are always looking out for energy assets to acquire, so BP will get a good price for those the choose to sell, even though it is known they need the cash badly.
Prudhoe Bay also had the sticking point of the right of first refusal from existing partners in the project, which include oil giants Exxon Mobil Corp. (NYSE:XOM), ConocoPhillips (NYSE:COP) and Chevron Corp. (NYSE:CVX). Exxon and Conoco have equal stakes of 36 percent and Chevron a small 2 percent stake.
Wednesday, July 21, 2010
Apache (NYSE:APA) Acquiring $7 Billion of BP (NYSE:BP) Assets
Coming on the heels of BP (NYSE:BP) aggressively shopping its assets in Pakistan and Vietnam, the deal with Apache has finally been confirmed, although for less money and assets than originally being looked for.
What was somewhat surprising, is no BP assets in Alaska were sold, which may point to them being the sticking point in prior negotiations where price was reportedly a factor in a larger deal valued at $10 billion by BP, and of which Apache had offered closer to $9 billion.
In the deal, Apache will take over assets in Egypt of an East Badr El-din exploration concession, while other assets in Texas, New Mexico, and gas projects in Western Canada and British Columbia are also included.
Combined assets account for approximately 385 million barrels of oil equivalent.
The deal is expected to be closed on July 30, and Apache will advance BP $5 billion before the close.
What was somewhat surprising, is no BP assets in Alaska were sold, which may point to them being the sticking point in prior negotiations where price was reportedly a factor in a larger deal valued at $10 billion by BP, and of which Apache had offered closer to $9 billion.
In the deal, Apache will take over assets in Egypt of an East Badr El-din exploration concession, while other assets in Texas, New Mexico, and gas projects in Western Canada and British Columbia are also included.
Combined assets account for approximately 385 million barrels of oil equivalent.
The deal is expected to be closed on July 30, and Apache will advance BP $5 billion before the close.
Monday, July 12, 2010
BP (NYSE:BP) Surges on Stopping Leak, Selling Alaskan Assets
BP (NYSE:BP) had it largest one-day surge in 20 months in London on the possibility they may be able to stop the oil leak in the Gulf soon, and that they could generate capital by selling off some of its Alaskan assets.
The new containment cap being put on by BP today, if it's successful, would effectively stop the flow of oil seeping into the ocean, giving them some breathing room until they permanently plug it with a relief well.
BP is also negotiating with Apache Corp. to sell assets they hold in Alaska for a little under $12 billion, which would exceed their original goal of raising $10 billion through asset sales. Other assets they could sell are in several South American countries and/or Vietnam.
That could mean they'll stop at that point concerning raising capital in that manner, or they're going to use asset sales as a chief way of raising capital, seeing some are hesitant to invest in them, as well as the share price of the oil giant has been rising significantly lately.
The Sunday Times in London also reported that Exxon Mobil (NYSE:XOM) has been encouraged or given permission to investigate bidding on taking over BP. It could be premature to think that Exxon, or any other major oil company would take on BP at this point, at least not until a more accurate picture of what their liability will be emerges.
The new containment cap being put on by BP today, if it's successful, would effectively stop the flow of oil seeping into the ocean, giving them some breathing room until they permanently plug it with a relief well.
BP is also negotiating with Apache Corp. to sell assets they hold in Alaska for a little under $12 billion, which would exceed their original goal of raising $10 billion through asset sales. Other assets they could sell are in several South American countries and/or Vietnam.
That could mean they'll stop at that point concerning raising capital in that manner, or they're going to use asset sales as a chief way of raising capital, seeing some are hesitant to invest in them, as well as the share price of the oil giant has been rising significantly lately.
The Sunday Times in London also reported that Exxon Mobil (NYSE:XOM) has been encouraged or given permission to investigate bidding on taking over BP. It could be premature to think that Exxon, or any other major oil company would take on BP at this point, at least not until a more accurate picture of what their liability will be emerges.
Wednesday, July 7, 2010
BP (NYSE:BP) Shares Surge as Company Confirms No New Issuance
Everyone knows BP (NYSE:BP) is in need of capital to take care of liabilities in the Gulf, and also to fend up potential hostile bids to take over the company.
To that end they have given parameters to their search for funds, and one of those is they won't be issuing any new stock as the means of acheiving that end.
That resulted in the share price of the stock rising, as issuing new stock would have caused the existing shares to be diluted, pushing down their value even more.
There seems to be a new rumor put forth every few minutes in media reports, with an endless number of "unnamed" sources given their idea on raising more funds.
One that seems to be real is the pursuit of sovereign wealth funds in the Middle East and some Asian countries. Libya has been the most vocal proponent of investing in BP.
To that end they have given parameters to their search for funds, and one of those is they won't be issuing any new stock as the means of acheiving that end.
That resulted in the share price of the stock rising, as issuing new stock would have caused the existing shares to be diluted, pushing down their value even more.
There seems to be a new rumor put forth every few minutes in media reports, with an endless number of "unnamed" sources given their idea on raising more funds.
One that seems to be real is the pursuit of sovereign wealth funds in the Middle East and some Asian countries. Libya has been the most vocal proponent of investing in BP.
Tuesday, July 6, 2010
BP (NYSE:BP) Cleanup Costs at $3.12 Billion
Cleanup costs in the Gulf of Mexico have now reache $3.12 billion, BP (NYSE:BP) said on Monday.
Claims against BP are closing in on the 100,000 mark. Of those, BP has made close to 47,000 payments.
To help provide more liquidity in the growing number of claims and liabilities, BP has a number of banks ready to provide them $1 billion in loans each. Available loans are reportedly at about $9 billion at this time, with the strong possibility of more banks entering into deals with the oil giant, which could bring those numbers higher.
BP is also looking to sell off some of their assets to raise another $10 billion.
Claims against BP are closing in on the 100,000 mark. Of those, BP has made close to 47,000 payments.
To help provide more liquidity in the growing number of claims and liabilities, BP has a number of banks ready to provide them $1 billion in loans each. Available loans are reportedly at about $9 billion at this time, with the strong possibility of more banks entering into deals with the oil giant, which could bring those numbers higher.
BP is also looking to sell off some of their assets to raise another $10 billion.
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.
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.
BP (NYSE:BP) May Sell Assets in Venezuela, Vietnam and Colombia
To meet its goal of raising $10 billion through asset sales over the next 12 months, BP (NYSE:BP) has reportedly been looking at non-core oil fields in Venezuela, Vietnam and Colombia.
Also being considered, and possibly on the top of the list is Pan American Energy in Argentina, because that one sale would be close to meeting the goal in one deal, rather than with several deals.
Concerning the other three assets, David Hart, an analyst at Westhouse Securities Ltd. said this, “These assets aren’t ones that they’ve been focusing on as much as in other regions. Pan American stands out because they can get close to the amount they’re targeting with one asset.”
BP has said in the past concerning raising the $10 billion that they'll focus on selling assets without a lot of future production growth.
Also being considered, and possibly on the top of the list is Pan American Energy in Argentina, because that one sale would be close to meeting the goal in one deal, rather than with several deals.
Concerning the other three assets, David Hart, an analyst at Westhouse Securities Ltd. said this, “These assets aren’t ones that they’ve been focusing on as much as in other regions. Pan American stands out because they can get close to the amount they’re targeting with one asset.”
BP has said in the past concerning raising the $10 billion that they'll focus on selling assets without a lot of future production growth.
Friday, July 2, 2010
BP's (NYSE:BP) Stake in Pan American Would Generate $9 Billion
With liquidity being a major factor in the health of BP (NYSE:BP) and their ability to handle the mounting liabilities connected to the Gulf oil spill, speculation that Pan American would generate $9 billion for the company was put forth by the Financial Times, which cited bankers, analysts and industry executives as to the amount it would bring on the market.
BP owns a 60 percent stake in Pan American, which is based in Argentina, and is looking to divest of $10 billion in assets, which would almost handle it all in one sale if it was to materialize.
Other rumors are the oil giant could be looking to divest of assets in the North Sea as well, with those generating up to $3 billion, although they had that in mind before the Deepwater Horizon accident, but could still be in play.
China National Offshore Oil Corporation has shown interest in Pan American, while Russia has shown interest in other assets from BP and is ready to invest with the right deal.
BP owns a 60 percent stake in Pan American, which is based in Argentina, and is looking to divest of $10 billion in assets, which would almost handle it all in one sale if it was to materialize.
Other rumors are the oil giant could be looking to divest of assets in the North Sea as well, with those generating up to $3 billion, although they had that in mind before the Deepwater Horizon accident, but could still be in play.
China National Offshore Oil Corporation has shown interest in Pan American, while Russia has shown interest in other assets from BP and is ready to invest with the right deal.
Thursday, July 1, 2010
BP (NYSE:BP) Searching for $5 Billion More in Funding
It's unknown how long BP (NYSE:BP) can continue going through the money they're spending on the Gulf oil spill, but they are again seeking to access more capital; reportedly looking for an additional $5 billion to help them with the liabilities associated with the spill.
The preferred method of raising this latest round of funding is through short-term loans from banks.
This doesn't include the $20 billion committed to the escrow fund for those making claims from damages related to the accident.
So far BP has paid out over $2.7 billion for cleaning up the spill.
The preferred method of raising this latest round of funding is through short-term loans from banks.
This doesn't include the $20 billion committed to the escrow fund for those making claims from damages related to the accident.
So far BP has paid out over $2.7 billion for cleaning up the spill.
Wednesday, June 30, 2010
TNK-BP Could Buy BP (NYSE:BP) Assets
One strategy BP (NYSE:BP) is sure to have to employ before the oil spill fiasco is over will be to sell off some of its assets in order to generate more liquidity for the company.
To that end, Russian joint-venture partner TNK-BP said it would take into consideration buying some of the assets held by BP when they are put on sale.
Maxim Barsky, who is deputy chief executive of the joint venture, said he and BP CEO Tony Hayward discussed this when he recently met in Moscow to talk with TNK-BP's chairman Mikhail Fridman.
Hayward did say on the same trip, to Russia's leading energy official, Igor Sechin, that BP had no plans to sell any of its assets in the country.
To that end, Russian joint-venture partner TNK-BP said it would take into consideration buying some of the assets held by BP when they are put on sale.
Maxim Barsky, who is deputy chief executive of the joint venture, said he and BP CEO Tony Hayward discussed this when he recently met in Moscow to talk with TNK-BP's chairman Mikhail Fridman.
Hayward did say on the same trip, to Russia's leading energy official, Igor Sechin, that BP had no plans to sell any of its assets in the country.
Friday, June 25, 2010
BP (NYSE:BP) Liquidity Under Pressure
The low credit rating of BP (NYSE:BP) which makes debt expensive for them, along with increasing costs of doing business, as in the rising insurance rates.
One means of raising capital to deal with the cleanup costs and current and future liabilities would be to sell off assets, which they're looking at doing, but that takes time, and that doesn't change the need to negotiate to get the best deal they can.
If they don't do that, they could end up with far less to work with than they hoped, which would take away a lot from the purpose of divesting of the assets in the first place.
Equity financing would be out of the question concerning their stock, as share price continues to plummet, so some are thinking alternative equity-related financing, possibly via a sovereign wealth fund would be the way to go.
BP maintains it's on solid financial ground, but the numbers aren't making sense as time goes on, and they're sure to need some round of financing that they can afford, and equity would be the most healthy for the company, as well as the quickest way to do it.
One means of raising capital to deal with the cleanup costs and current and future liabilities would be to sell off assets, which they're looking at doing, but that takes time, and that doesn't change the need to negotiate to get the best deal they can.
If they don't do that, they could end up with far less to work with than they hoped, which would take away a lot from the purpose of divesting of the assets in the first place.
Equity financing would be out of the question concerning their stock, as share price continues to plummet, so some are thinking alternative equity-related financing, possibly via a sovereign wealth fund would be the way to go.
BP maintains it's on solid financial ground, but the numbers aren't making sense as time goes on, and they're sure to need some round of financing that they can afford, and equity would be the most healthy for the company, as well as the quickest way to do it.
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