Banking, finance, and taxes

BP Raising Billions (BP)

BP plc (NYSE: BP) is set to raise a few billion dollars in cash after a bond offering has been filed with the SEC this morning via its BP Capital Market plc unit.  This is the funding unit of troubled BP, and the notes will be guaranteed by the parent company.  BP filed to sell five-year and ten-year bond maturities in a benchmark offering and the bonds should price late today.

Among the huge underwriting group is Morgan Stanley, Barclays Capital, BNP Paribas, Citigroup, Goldman Sachs, and Royal Bank of Scotland.  Unless any ratings agency changes come, these are also expected to be rated “A2” at Moody’s and expected to be “A” at Standard & Poor’s.

The net proceeds of the offering will used for general corporate purposes, paying down existing debt, and probably or ultimately working toward offsetting that huge $20 billion commitment for the Gulf of Mexico disaster.

The filing does not disclose terms nor does it divulge the exact size of the offering.  The benchmark note size implies that this offering could reach into the billions.

JON C. OGG

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