S&P raises BP to stable on oil spill settlement, cost cutting

(Reuters) - BP Plc's settlement of the Deepwater Horizon blowout and its cost reduction efforts should support its credit ratios to the end of 2016, ratings agency Standard & Poor's said, revising its outlook on the oil and gas major to stable from negative. S&P affirmed its highest 'A-1' rating on BP's short-term credit and 'A' on its long-term issue. S&P's 'A' rating considers a company's ability to meet financial commitments as strong, but leaves room for adverse events or changes in economic conditions. "The stable outlook reflects our view that BP's credit metrics in 2015-2016 will be supported by its divestments and reduced capital expenditure, which should largely cover the negative discretionary cash flows we forecast," S&P analysts said. (http://bit.ly/1LFf5PE) S&P said BP's $18.7 billion settlement of federal, state and local claims stemming from the Deepwater Horizon accident in 2010 reduces the uncertainty around the upper limit of possible claims. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Don Sebastian)