Here’s Why Royal Dutch Shell plc Was Downgraded By S&P
According to S&P, the softness in crude oil prices and significant capital expenditures, despite recent spending cuts, have weakened Shell’s financial risk profile, which is reflected in the ratings downgrade.
Standard & Poor’s (S&P) has downgraded the credit rating of European oil major Royal Dutch Shell plc (ADR) (NYSE:RDS.A) by one notch, according to a note released Tuesday. The credit rating agency has lowered the long-term corporate credit rating for Shell from AA to AA-, while affirming a short-term rating of A-1+.
“We removed the long- and short-term ratings from CreditWatch, where we placed them with negative implications on April 9, 2015,” S&P said in the note. According to S&P, the softness in crude oil prices and significant capital expenditures, despite recent spending cuts, have weakened Shell’s financial risk profile, which is reflected in the ratings downgrade.
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