BP Plc (BP) may sell as much as $3.5 billion in debt as early as today, marking the oil giant's first bond sale since its Deepwater Horizon rig exploded in the Gulf of Mexico in April, Bloomberg News reported, citing a person familiar with the process.
Affiliate BP Capital Markets today filed documents with the Securities & Exchange Commission to sell notes due in 2015 and 2020, though the company didn't specify how much money it hoped to raise. Credit-default swaps protecting against losses on BP debt for five years have fallen, indicating increased confidence in the company, according to Bloomberg.
BP continues to address the effects of the April 20 Deepwater Horizon explosion, which killed 11 workers. The company, which owns 65% of the rig, took a second-quarter charge of $32.2 billion to account for expenses relating to the explosion, and its CEO Tony Hayward stepped down in late July.
The company now seeks to issue debt because of lower interest rates and the expected response from credit markets, and not because of expenses related to the oil spill, the wire service said, citing BP spokesman Robert Wine, who had earlier indicated the possibility of a $2 billion debt offering. BP had $22.3 billion in finance debt as of June 30, down from $25.5 billion at the end of last year, the company said in late July.