Kaminsky's Call: BP Bonds to the Rescue?
Morgan Stanley, Vice Chairman
Amid the constant bloviating out of Washington yesterday came some real news on the BP front courtesy of some excellent reporting from my colleague, Kate Kelly: BP could come to market with a massive bond offering as early as next week.
For those thinking of buying BP stock, my call to action could not be more timely: Wait and see how that potential bond sale goes before doing anything.
Additionally, I wonder if any potential deal would need to include provisions that force BP to pay creditors more if its debt were to be downgraded.
Some are speculating a deal near $20 billion.
Don't get me wrong. BP brass doesn't view this as some type of "opportunistic financing," where they're taking advantage of low rates. This is a dose of bad medicine intended to shore up its balance sheet in the face of an overwhelming predicament.
Still, if this deal is a success, long-term investors can begin to assign some type of value to BP stock, and the uncertainty that surrounds the company today will begin to fade.
Only then will I like the idea of buying the BP.
BP's spokesperson had no comment.
- BP in Talks for Muti-Billion Debt Offering
- Angry Lawmakers Accuse BP CEO of Stonewalling
- US Congress Mauls Hayward
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Gary Kaminsky does not hold any equity positions.
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