Jun 17, 2020

BP raises $12bn in wake of multibillion-dollar writedown

UK oil major BP raised $12bn of debt with equity-like features on Wednesday, taking advantage of hot corporate credit markets to fortify its balance sheet. Credit rating agencies do not treat the securities like traditional bonds and typically only count about half the value of the hybrid notes as debt. BP had never previously tapped the hybrid market and its debut demonstrated the heightened appeal of the debt even as the coronavirus crisis pressured its business. "BP hasn't issued hybrids in any market and now they're hitting every market at once," said Colm Rainey, director of debt capital markets at Citigroup. The oil major's dollar-denominated debt priced with yields of 4.375 and 4.875 per cent in two tranches with an option for BP to repay investors in five and 10 years, respectively.

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