BP successfully returned to the bond market on Tuesday, five months after its disastrous oil spill in the Gulf of Mexico left investors worrying whether the giant energy company could survive the tens of billions of dollars in cleanup costs and liabilities.
A subsidiary, BP Capital Markets, sold $3.5 billion worth of debt in two parts, according to IFR, a Thomson Reuters service. The prospectus for the debt issue notes that payment of the principal and interest is fully guaranteed by BP.
The sale included $2 billion of notes due Oct. 1, 2015, priced to yield 195 basis points over comparable Treasury securities, Reuters reports. The sale also included $1.5 billion of notes due Oct. 1, 2020, priced to yield 210 basis points more than Treasuries.
The joint lead managers were Barclays Capital, BNP Paribas, Citigroup, Mizuho Securities USA and the Royal Bank of Scotland, according to Reuters.
Bloomberg News notes that BP has regained its investment-grade status among investors. Credit-default swap prices, which climbed to levels that implied BP’s debt was junk-rated after the oil spill in April, declined last week to imply a rating of Baa3 by Moody’s Investors Service, the lowest step of investment-grade, according to Bloomberg.
