BP Shares Hold Steady Despite Fitch Downgrade

15th Jun 2010 11:34

By James Herron Of DOW JONES NEWSWIRES LONDON (Dow Jones)--BP PLC (BP) shares held steady Tuesday despite Fitch Ratings downgrading its long-term issuer default rating to BBB from AA Tuesday, citing significantly higher estimates for the size of the oil spill in the Gulf of Mexico and demands from the U.S. Congress to place $20 billion into an escrow account to pay compensation. Despite the severity of the six-notch cut in its rating--two notches above junk--BP remains at investment grade and the market shrugged off the announcement. At 1029 GMT BP shares were unchanged at 355 pence, after closing down more than 9% Monday. The FTSE100 index was up less than 1%. The increase in the spill estimate in particular, "will materially increase BP's exposure to Justice Department fines payable in the near to medium-term," it said. BP could face maximum civil penalties of $1,100 per barrel of oil spilled, rising to a maximum of $4,300 per barrel spilled if BP were to be proved negligent. The demands for an escrow account also represents a "material change" in the approach of the U.S. authorities to the spill cleanup and compensation, Fitch said. -By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected] (END) Dow Jones Newswires June 15, 2010 06:34 ET (10:34 GMT)