This page has been archived and commenting is disabled.
With BP's Dividend Cut A Done Deal, Here Is BP's Scary Debt Maturity Schedule
Now that BP's Q2 dividend of GBP1.8 billion ($2.6 billion) is virtually certain to be cut after increasing political pressure from the US president and house Democrats, impacting thousands of pensioners who rely on BP for annuity payments, the next question is whether the Obama administration will also be able to enforce additional capital structure limitations higher in the capital structure. If Chrysler and the Steve Rattner doctrine is any indication, we would not be surprised to see the administration next demand that BP creditors take the next haircut. Below is a chart of the upcoming 3 years of scheduled principal and interest maturities, payments and amortizations from the UK oil giant. Of BP's total $24.9 billion in debt and loan maturities, $11.4 billion, or 45%, comes due by the end of 2012. Add another $2 billion in interest payments over the same period and you get a number well over $13 billion. The bulk of this is due in 2011. BP better get its act together by then or those bondholders will certainly be seeing an Obama-mandated haircut on their maturities. That is, of course, assuming the company is not bankrupt long before then.
Below is a chart of BP's annual scheduled debt maturity/amortization:
And the same on a quarterly basis:
And now you know why BP's curve is massively inverted with the 3Y far beyond the 5Y: investors are increasingly concerned BP will not last to 2013, let alone 2015. We hope for all those Scottish Widows' sakes that Obama does not decide soon to appoint an International Adjusted Chapter 11 Czar as well. At least, in the wake of Steve Rattner's criminal allegations and what not, we are confident Obama will have a plethora of soon to be criminals to pick from for this next most critical position.
h/t Credit Trader
»
- 9106 reads
- Printer-friendly version
- Send to friend
- advertisements -
Wonderful of you to keep those widows' interests in mind. Touching, really.
longjohn, the widows are screwed anyways in a geopolitical trend towards wealth destruction of the middle-class (and retirees). So, your sarcasm may be a bit misplaced. The point is that, while standards of living are at stake, it is deplorable how governments continuously jettison the rule of law - rather than letting the financial system work things out. If your pension fund invested in a risky asset and lost, than poor you - but that's no reason to lay the bill on everyone else's shoulder. What do you think - should widows get equity market returns without also accepting the risks?
I'm sure the strategic defaulters here on ZH don't give a damn either.. that's pretty evident.
Well now.
Socialism, Nationalization and Exproproation (A la, the treatment of GM and Chrysler senior secured debt holders.) are as Socialism, Nationalization and Expropriation Does, when Particularly most directly impacting our some of our European Allies.
My oh, my. How Populist Politics at Home shall Ravage and Decimate our Political Realities World Around.
Each and every time America pulls these Stunts (aka this shit) the Country becomes comparatively less and less favorable as a Residency for Foreign Capital.
Forget not, until the recent Euro "pressures", the Almighty $US was takin' an Almighty Beatin' on the FX market relative to other countries viewed as more stable, more hospitable, such as Australia, NZ and Canada. And should the Euro meet an even greater demise, a reborn Deutsche Mark (and Swiss Franc, even currently) will reattain Premier Flight Capital Attraction.
Oh yeah and Timmah's talkin' 'bout a Trade War with China for Currency Manipulation, too.
Sweet Dreams.
Hahaha JPMorgan had a wife? When did JP die?
Deepwater Royalty Relief Act of 1995
Long RIG, short BP seems like a great pairs trade from this level.
How much do you think RIG gets out of its indemnificatio from BP if BP goes in the can? And I repeat my prediction on other threads: BP (maybe just the North American entity) is going in the can.
Watch out for Bob's crew at Blackrock, have to start offloading some ES & SPY's this afternoon into the close to offset Mondays BP's action.
It strikes me that the div cut has been already priced in. In addition, CNBC's continuous showing of the pipe spewing oil makes me think that a short term bottom is in the offing.
GS bought all those SPY futures yesterday.
That's a bummer dude.
Perhaps they can get that mess all cleaned up before 2011. If not, maybe a name change will help. Buyout a lessor cap size company with a good american name.
Standard Oil 2.0 ?
Jiffy Lube?
But.....but.....what?
LOL
:>)
good one LOL
Why buy when Amoco and ARCO (Atlantic Richfield) are already names in the stable?
Make it Sexy And American; "Kentucky Jelly" Tick symbol; KY
US is playing England tomorrow.
Could get personal...
will be more entertaining than many games at the World Cup then
Obama should tone down the rhetoric for no other reason than we need BP to have some value left to help pay for this mess.
But I can't believe the Brits really want to get in a pissing match over pension fund losses versus economic impact to the gulf states. I don't think its much of a comparison.
Also, I can't believe that they're blaming Obama for the stock's loss, when there might be other factors. Like for instance a giant oil gusher that they've been unable to stop.
1: British law requires the government pay market price when nationalizing a company.
2: The more rhetoric Obama spews, the more affordable nationalizing BP becomes for the UK government.
3: Once nationalized, BPs assets become protected via Sovereign Immunity.
4: These assets then by used by the UK to underpin their pension system.
5: Profit?
Interesting...
It would be a lot more interesting if the UK wasn't dependent on uncle sugar's liquidity spray. I wouldn't bet on them biting the hand that feeds.
So Barry is going to keep running his mouth then. The only thing he is good at....
You're almost devious enough to work for the Tri-Lateral Commission.
http://twentypercent.tv/2010/06/11/uk-vs-usa-war-of-words-over-bp/
This is how the breadcrumbs to wars begin. Protectionism and the fight for resources and survival. And that is why regardless of our money printing the dollar will rise because when the hopes for globalization lead to an increase in the number of conflict and scenarios for war the U.S. always remains as the only superpower remaining which can close all borders, control seas and exert military might without fear of reproach.
So here is an interesting scenario. What if America begins to be seen by the world if they adopt an isolationist approach to handling the coming depression and are viewed by outsides as imperialists (which I cannot confidently state is a mantle we do not deserve) and united against America in order to ensure their own survival. No one can forsee what the next 20 years have in store.
If equating BP oil spill toxins to U.S. financial toxins is the point of view of foreigners they can simply shut out U.S. financial firms from participation and destroy our markets.
Rep. Ed Markey (Socialist, MA) was on Chris ("my leg tingles when I think about Obama") Mathews yesterday. He said that "BP should not be allowed to pay its bondholders anything until they've cleaned up the Gulf mess". By "not pay bondholders anything" I assume he includes interest payments. Of course, just to reinforce his ignorant socialist credentials, he went on to rant that "BP can not be allowed to go bankrupt to avoid its responsibilities", unaware that by not paying creditors BP would necessarily put itself into bankruptcy.
according to Socialist math:
"We will spend our way out of debt"
with minds like these, what else can we expect?
I must be tired because my first reading was "socialist meth". Still made sense though.
New Concept.
"Markey to Market". Default on Debt and Still Retain Value.
Plus, so few of our politicians have yet to realize (Duh Factor from Dancing With Jarts) that BP is domiciled in the UK. Can certainly expropriate its US assets, but may well not be able to force the whole of it into a formal bankruptcy.
Message to BP: DO NOT CAVE IN TO THE DEMANDS OF THE AMERICAN IDIOT PRESIDENT. TELL HIM TO F HIMSELF.
Do not cut your dividend. Do not punish your shareholders any more than they are going to be punished. This is unfair to shareholders. We need laws that protect shareholders from EVIL AMERICAN PRESIDENTS!
These bastards are going to bankrupt you. Yes, you are idiots for letting this disaster happen. But, hell, the shareholders had nothing to do with it. Fire all the retards working for BP and fire the Board of Directors. Get a new group of employees. HELL, HIRE ME! I'D LOVE TO WORK FOR BP!
If politicians and environmentalists want to destroy you, destroy them. UNPLUG ALL YOUR WELLS AND LET ALL OF THE OIL OUT OF THE CENTER OF THE EARTH UNTIL THEY ALL DROWN IN IT! F OBAMA. F PELOSI. F AMERICA. I HOPE YOU ALL LOSE YOUR DAMN JOBS BECAUSE YOU DON'T DESERVE THEM.
(I am tired of political bolshevik. America is nothing but political bolshevik, er, I mean, bullshit.)
The most rediculous ass kissing I've ever seen.
Hire me. I'll kiss your ass for $150,000 per year plus bonus. OK? Is it a deal?
I see you went long on BP with Jim "Broke" Cramers blessing.
No firstdivision. Not everybody who posts here talks their book.
I have empathy for BP shareholders (and I would love to work for BP, but that is a side issue; they overpay their employees; Hell, at least I wouldn't be a government employee.)
BP shareholders need our support. The idiots who run it apparently skipped the class about "Safety in Deep Sea Drilling" when it was offered at corporate headquarters that day. Why should the shareholders suffer? Because they freakin' had any say over who works in the damned place? No! Management is entrenched. The Board of Directors is complicit in it. Poor shareholders only eat the scraps that fall from the master's table.
You know what, BP executives and engineers blew this thing BIG TIME. But, I really am getting dang tired of the blowhard political grandstanding. I am tired of the stupid response from the U.S. government. Hell, George Bush couldn't possibly stop a hurricane. But, you could bloody well be sure even Bozo the Clown could have probably stopped this oil leak if he had the resources that "O-F-ing-stupid ass couldn't wipe his ass clean-bama" has. Trouble is, this President is even dumber than Bozo the Clown and can't figure out how to marshall the assets to fix it. "BP can solve the problem." BP can solve the problem my ass. Even Bozo the Clown would have figured out that BP couldn't solve the problem. Just ask them a few pointed questions. Watch them squirm in their chair. Figure out that they were actually shitting in their pants. Get off your dumb ass, stop looking at the stupid ass teleprompter 'cause the answer ain't there, moron, and marshall your resources.
Oh, forgive me. Dumb ass America put a man in the Presidency who didn't understand how to marshall resources, let alone solve problems. He only learned how to create marshall garbage and create problems. That is why we are in this F-ing mess America. Your dumber than Bozo the Clown President doesn't solve problems; he creates them. Got his degree in Telepromter Reading from Harvard. Don't laugh. At least you can get a job with that degree. The President did.
Better yet, print up a few trillion $1 bills, fly Helecopter Ben over the spill site and have him stuff the worthless currency down that pipe. Now that would be marshalling your assets.
Being a stockholder means that you are still on the hook if management fucks up. It does not abstain you from getting hurt should a major accident occur. Did you cry for the stockholders of all the dotcom companies that had an IPO one day and were wiped out the next? If you are unwilling to take on risk, get the fuck out of the game.
How does our political system and overall "stupid Americans" have to do with a company that did not perform due diligence and let the chance for a disaster fester? BP fucked up and now they have to pay. Plain and simple.
You have no idea how much the GoM spill will effect our economy here. Hopefully they open drilling in your country and spill it all over the landscape making large swaths of it inhabitable. Then let me see you cry for the shareholders of the oil company that acted with hubris.
Now firstdivision, let's not get personal. You have not idea how appalled I am at the GoM oil spill. I am pissed off at BP, too. But, if management mucks up, they still have their jobs to drag their worthless asses to each morning. The F-ing stockholders pay the price. "If you are unwilling to take on risk, get out of the game." Puhlease! You are preaching to a capitalist. I just don't like a rigged game run by asshole politicians.
I JUST HAPPEN TO THINK THAT A BIG PART OF OUR PLIGHT HERE IS CAUSED BY OUR ASSHOLE PRESIDENT DUDDLY DO-WRONG WHO HAS TONS MORE RESOURCES THAN ANY OTHER PARTICULAR INDIVIDUAL ON EARTH AND COULD ACTUALLY DO SOMETHING ABOUT THE OIL SPILL, BUT WOULD RATHER WAG HIS WORTHLESS PIECE OF SHIT HARVARD TONGUE AT A TELEPROMPTER THAN DO SOMETHING CONSTRUCTIVE.
And yes, no matter what you say, I still think that shareholders are an abused, discrete insular minority. They should be subject to special constitutional protections from liberals, the media, politicians and anybody else who would exploit unfortunate circumstances to steal from the sacred coffers of a corporation whose money could be better used to pay for the security of widows, orphans and retirees (don't forget the overpaid employees) RATHER THAN FOR THE POLITICAL BENEFIT OF AN F-ING CORRUPT PIECE OF SHIT U.S. GOVERNMENT.
Would you be happier if you loaded up on puts the day the platform exploded?
I did, and I'm pretty happy at this point :)
yes, yes i believe he would be.
Me too.
Sounds like you need to join fight club. Fightclub turns the volume down on everything.
shush, dude
Obummer will fix this.
you'll hate this RicardoM, but it would appear that you have much in common with "Bozo" - you'll both work for big money, irrespective of the harm your actions may cause. . .
(psssst: the POTUS is always installed, never elected. . . there is merely the appearance of demo-crazy. . . left side, right side, same body - need to cut off the HEAD to kill it. . .)
Didn't anyone tell you. Stop using innacurate acronyms (POTUS- President of the U.S.). The real acronym is BTCUS (Bozo the Clown of the U.S.).
And yes, I am Bozo the Clown. I hate competition from other Clowns and I don't like to be undone. It appears that the People of the U.S. (the new POTUS) have lost their minds and have lowered their intelligence to below mine when they elected BTCUS. That really sets me off. We clowns are a volatile bunch. We even have the temerity to despise the people who laugh at us.
pssst: Obama was elected. The intelligencia (now there is an oxymoron) would never have permitted the election of GWB, would they? HELL, NO WAY. That is all the proof you need that the President is not "installed".
Constructive? not so much. I'm guessing you are not a fan of our current administration. We are in agreement here.
However, if the clean-up / restitution requires greater assets than BP currently has, best case is to BK the company and sell off the assets. Doesn't mean oil drilling will stop or end of carbon based energy. Shell or somebody else will buy and continue to run the biz and probably run it much more conscientiously.
Someone will pay for the clean up - shouldn't be taxpayers. However, this also means that in the end all global oil consumers are going to be paying more for the increased risk premium of oil exploration and production. This seems unavoidable.
Hambone. Let's not get constructive here. Let's not talk economic common sense. Why should be talk common sense when, every day, we conduct business as usual even though the country can never pay its public debt? Hell, stayin' home and stuffin' my head under my pillow would be constructive and make common sense under such circumstances.
I am all for raping companyies when they cause disasters. The U.S. government never misses an opportunity to rape anybody of all their money when given the opportunity. Just a reason to screw someone or something that isn't a taxpayer; just another excuse to steal money.
Taxpayers, smaxpayers. They can't even pay their own government bills, so how in the hell are they going to pay for this thing? They need to multiply their current tax bill by 2.4 just to make the government even this yar. The taxpayers ain't gonna pay for nothin'. They ain't got the money. What is a few more trillion unpaid dollars to the U.S. taxpayer?
I have a better idea. Let's bankrupt BP, take all their money and leave them with nothing. Then, we can bail them out later. Rather, give the money to the UK so they can bail them out. Any way you look at it, it is just a bunch of circular bolshevik.
If you own the stock then you are a part owner of the company. If the company looses you lose. Erase BP from planet earth. Anyone who is dumb enough to still have faith in these corporate giants deserves a dose of reality medicine and loose their ass on it. There is such thing as TOO BIG and this is just another perfect fucking example of it. Burry BP under the sea bed. Fuck em. You fuck up this bad you go bye bye. BP fucked the pooch royaly. Time for BP to go bye bye. Sorry if you worked for them. Sorry if your pension takes a hit. Sorry, but we all have pain coming in one form or the other. Let the chips fall where they may.
JuicyTheAnimal, do you have a job? If so, I hope you lose it. Then, you might appreciate those dumb ass corporations that might otherwise employ your worthless ass.
Just one more corporation that might have otherwise employed my worthless ass. That's the way I look at it.
BP IF YOU ARE STILL OUT THERE. PLEASE HIRE ME. PLEASE PAY ME LOTS OF MONEY SO THAT I CAN LIVE THE AMERICAN DREAM BEFORE IT IS ALL GONE AND PISSED AWAY BY PEOPLE LIKE JUICYTHEF-ING ANIMAL LET THE CHIPS FALL WHERE THEY MAY BLOWHARD.
"Time for BP to go bye bye." Because of people like you, I hope BP evicerates all their assets to the shareholders before they pay for one damned claim. F-you and F your high and mighty opinion.
BP is nothing like Wall Street, JuicyTheAnimalm, and ain't nothing like Washington, D.C. Wall Street and those fucking asshole politicians in Washington are the crappy smum sucking vampire squid peeon trash that need to go bye bye, NOT SOME COMPANY THAT HAPPENED TO HIRE SOME STUPID SHIT PETROLEUM ENGINEER WHO WAS TOO BUSY SCREWING THE LOCAL DEEP RIG WHORE THE NIGHT THE EARTH DECIDED TO FART METHANE GAS UP A STRING OF PIPE AND WASN'T PAYING ATTENTION TO THE "SAFE DEEP DRILLER'S MANUAL" AT THE TIME. You see, I actually believe that BP is doing the right thing trying to find oil and all. I KNOW THAT THOSE ASSHOLES AND WALL STREET AND IN WASHINGTON, D.C. DON'T GIVE A CRAP ABOUT DOING THE RIGHT THING.
Too bad our idiot laws make it difficult for BP to actually tell the truth. I don't blame BP. If they tell the truth, they'll just get fined more BY WORTHLESS ASS BUREAUCRATS.
BP, preserve theyself. Fuck em all. Their house ain't nothing but filled with whores.
BP is bankrupt. Get over it. If they aren't bankrupt then they are about as responsible as 14 year olds with nuclear weapons. They'll file bankruptcy before the month his out.
Well, if they are responsible Wall Streat Banksters or a certain Democratic Senator from Connecticut or Nevada, BP would:
1) Spin all valuable non-U.S. assets (with applicable non-U.S. liabilities so as not to piss-off everybody on the planet) off into a new corporation (Goldman Sucks Newco Screw the U.S., Inc.).
2) Distibute the shares of Goldman Sucks Newco Screw the U.S., Inc. ratably to all existing shareholders of record.
3) Sell all U.S. assets to anybody will to buy as quickly as possible (Cash From Sale of U.S. Assets). Do not pay any liabilities. This is important.
4) Distribute Cash from Sale of U.S. Assets ratably to all existing shareholders.
5) Wait for bailout of U.K. government from U.S. Federal Reserve Bank.
6) Take money from bailout from U.K. Office of the Exchequer or whatever they call his worthless ass over there.
7) Distribute as little money as possible from bailout to pay U.S. liabilities. Screw all the people that you can. Call it "Doing God's Work".
8) Payout large sums of remaining unspent funds from Doing God's Work to worthless U.S. Congresstrash in form of campaign contributions to avoid the wrath of U.S. prosecutors. How much? It doesn't take much for the rudder to steer the ship, douchemeister.
9) File Chapter 7 Bankruptcy. Try to screw U.S. lawyers if you can.
10) Defend actions in U.K. courts.
I just wrote the new BP business plan in 10 easy steps and I didn't even charge them. Now that is what I call responsible action from a grown adult in New York working on Wall Street or pretending to work in Washington, D.C. And...it is more responsible than letting a 14 year old mess with nuclear weapons.
I think that procedure is called Lheminazation. Only replacing brits for bag holders instead of asians.
"And....it is more responsible than letting a 14 year old mess with nuclear weapons."
Did you choose the age 14 because it is actually how old you are? Or because it matches your development level?
14 was the age used in the post that I was commenting on. It is above mine.
I was intimating that it would not be irresponsible for BP to file bankruptcy and that BP is not as irresponsible as our models of responsibily. But, rather, our perfect models of adult, mature responsibility, like Lloyd Blankfein or any elected official in Washington, D.C. would do something more sinister than BP if they screwed up a well operation. They would do my 10 step BP Business Plan.
This baloney about beating up BP is nothing more than hypocracy. YOU DON'T BEAT UP RETARDS FOR HAVING THE IQ OF A COLONEL, DO YOU? No, you understand their limitations and do what is necessary under the circumstances. Let's say you are a Military Officer and have a gun. You don't leave it around for your grandson to discover. If he does, and you are cognizant of it, you do something about it...like TAKE IT AWAY.
Our President has access to a lot more money and smart engineers than BP, Colonel. BP's management is not capable of dealing with the problem at hand and our President, who is perhaps less capable of running a Dairy Queen outlet than a 14 year old (no offense to owners of Dairy Queens; this is not intended as a smear), runs to the teleprompter and starts reading. Any 14 year old would say, I don't know what to do and start asking his advisors. They'd say, let's call in all the Petro Engineers that ever graduated from Rice University or something like that and get this thing fixed. We'll use the military to deliver it.
I am sorry about my development level. I can't do anything about it. Genetic.
I agree wiht Heph: game over for BP, writing on wall. And for good reason. They are idiots who deserve to go under, and their shareholders have a right to be pissed about their lost money, but that's about it.
Forget this Obama this and Obama that: thinking the US President has magical powers is silly. They have been powerless to deal with this problem, as its true nature and extent have been hidden from Day 1.
Who said the President has magical powers? He has a duty to respond with all his powers to marshall all of the assets of the U.S. government to respond to a national crisis.
Powerless? Ned, next time you piss off the President, you will find out just how powerless he is.
Nooooooooooooooooo...the President only claims to be powerless 'cause he is ill equiped for the job as President, Ned. GWB was, too. This does not mean that I would let any of them off the hook for being too stupid to move the government of the U.S. to Houston for a few months until the spill is stopped. (Ned, I would not move the Office of the Presidency to Houston to soak up sunshine. I would move it because all of the freakin' petroleum engineers in the universe worth a pinch of salt probably come from Houston. The answer probably lies more likely in the minds from Houston, not the idiot teleprompter.)
This President is sooooo much fun to make fun of. He makes GWB look like Einstein. Stop this bolshevik about the President being a eunuch.
hang on...this is getting stupid. I love this site and think it adds tremedous value but to think BP is in trouble is insanely bad analysis. BP earned 34B pretax in '08 and 20B pretax in 09. Max fine/clean up costs have been put at 35B...but that is non-discounted. Such a payment will be over 8-15 years. At a 9% discount rate, it reduces the npv to 9-18B in the worst case. 90B of mkt cap has been wiped out. mkt cap = discounted future cfs.
And, if obama goes nuts and tries to destroy the UK's largest tax payer at a time of fiscal stress in the UK, the UK will respond with wild attacks on our I-banks. Finally, BP North America can easily file for bankrupty, hand of 20% BP PLC assets and say goodbye and FU to Obama. Either way the stock is undervalued MATERIALLY.
You guys are just piling on. buy the stock, ride it back to 48, then sell it.
"Max fine/clean up costs have been put at 35B"
"hang on...this is getting stupid."
This oil leak has the ability to ruin economies
I have heard through my channels that this thing could be 10 x's worse than the "Worst" estimates and it could go hypergusher.
So dont say we are stupid !
I like Gulf Oil...
you didnt mention lawsuits and the fact that a run on the equity further will completely cut them out of the credit markets, and I dont see anyone lining up to lend BP a lot of money at a good interest rate right now. And a secondary at these levels is completely out of the question.
Buying BP on supposed fundamentals is ridiculous here, potential pop to 48 or no. Especially when you can buy good companies with no GOM spill liabilities that have been down in sympathy. It makes zero sense at all to get involved. Good luck to you.
Why would a "run on their equity" cut them out of credit markets? BP is not an investment bank. They don't fund their business with short term paper as they utilize long term assets. BP's share price could go to $10, so what. They don't need to tap capital markets, equity or debt.
All that matters for BP is that their assets continue to generate expected cash flows, and that the NPV of those cash flows exceeds financial debt + contingent liabilities.
BP Equity = NPV BP CF - Debt - Contingent Liabilities
The worst case estimate I've seen is pre-tax contingent liabilities of $70 bn, or $46 bn after tax.
The market cap is down a lot more than $46 bn, so the contingent liabilities are more than "baked in"
Well, everyone's entitled to their opinion... I see that number as being VERY far from being fixed in stone - you seem to forget that the magnitude of the disaster is without precedent. In the meantime, I though this bit to be hilarious, in a nauseating kind of way:
One would think this could have been done, say, I dunno, on day 1? Or rather, was done on day 1? I know this is late in the game to be asking this, but wouldn't the BOP control panel have SOME sort of indicator as to throughflow? I am curious as to the story that will be spun when the "upgraded" oil collection is at 50K bpd, and the outflowing stream STILL has not abated...
Logic alert....logic alert...this guy, CD, is resorting to logic.
Will somebody puuuhhlease mark him down for this!!!!!
(And no doubt there is a BP bailout in the works, otherwise poor Rahm Emanuel will forfeit his BP-paid for expensive apartment.)
A momentary fugue, Sir... I'm very sorry, I don't know what came over me. Maybe the dispersant fumes. It won't happen again, Sir.
Not to mention, the whole "blowout protector constantly degrading" thing, or the whole "second leak site 5-6 miles away" thing.
Not to worry, the Chinese are going to buy BP...............and be A#1 son...........
http://www.cnbc.com//id/37607812
News Flash!
Aug. 08, 2010
PetroChina buys BP -- and in honor of the anniversary of the movie, "55 days in Peking" -- renames it to BritishPoop!
heh heh
+awesome
Hum... if you were a CFO of a large organisation you should really be familiar with the DDIS function and what is the WRONG shape to have appear on it.
Anyway, my question is if BP cuts the divi, will the pension funds have to sell assets to raise cash for pension payments?
$30 billion cash flow / year for 10 years will probably cover the yearly clean-up costs , lawsuits , interest , debt restructuring
of course , no one talks about that ... it's better to talk about the negatives
TD - enough already about the Scottish Widows!
If BP goes bust that particular insurance company loses less than 0.5% of its total investment funds. A bad day at the office.
Why all this concern about little old BP when the US Gov is a gadzillion in debt and bringing down a lot more than the fishes in the Gulf. It's all a convenient diversion before the main act
Excuse me, but who the frack do you think should pay for this mess? US taxpayers? BP screwed up so BP should pay, and pay, and pay, til its wiped out if that is what it takes to pay off the claims. And yes, bond holders and stock holders get wiped out in that situation. What the hell else should happen? More moral hazard?
Jesus Christ, people. Every time someone says that a financial firm should pay for its foulups, some Wall Street tit suckers here at ZH try to cry crocodile tears like they should somehow be exempt.
I got news for you - you break it, you pay for it. You don't want that risk? Then don't hold BP (or Exxon or Chevron or ... ) stocks or bonds.
It's the implied tone of this original post that I see over and over again (better leave me alone or I'll implode and hurt whomever invested in me!!) that has us in this damned mess. We NEED some of these firms to go flat on their ass dead, wiped out, busted completely. A little bit of that might just scare the rest into moving back inside the rules instead of outside the rules.
Because quite frankly, if we get more bailouts, more moral hazard, more violation of the basic rule of law, then you're headed for anarchy in the streets, and those Hampton boys and girls are going to find themselves hunted with coon dogs up and down the Appalachian Trail.
Buddy , get to a methadone clinic ASAP , it's Friday
BP is not going to go bankrupt because they are worth more to this administration alive than dead. QED
We are all freaking doomed.
Get on the lifeboat and float away from this sinking ship
I think:
the Gulf oil spill is a significant, and likely long-term tragedy,
BP has been incompetent,
the Obama adminstration has been incompetent,
the economic effects of this disaster are greater than the market reaction,
the U.S. has to continue to drill in the Gulf,
Good guys involved in the oil spill = 0.
Millions of people are going to die from it. Sadly I am serious.
Mr. Lennon Hendix. With all due respect, how are millions of people going to die from "it" ("it" being the oil spill), por favor? I ain't seein' them (millions of people) as being all stupid and all to go a rushin' in to eat the fish from the water or guttin' all the birds, featherin' them and selling them as chicken broilers, do you?
Sadly, I am serious, too. I realize this is an environmental disaster, but I need to see the series of events that would cause millions to die from the oil spill. Now, if you're talking fallout from a nuclear blast or the moon falling out of the sky and fallin' on Miami (Moons over Miami), then I can see millions dying.
I am thinking that millions of people will be horribly, adversely affected by the oil spill. I can even see many people dying from the disaster, maybe ignoring the fishing ban or drinking water contaminated from oil that seeps into the water table on land.
Oil is not Agent Orange, is it? If it is, maybe the U.S. military needs to gather up all that oil and put it to better use.
"I am thinking that millions of people will be horribly, adversely affected by the oil spill."
Touche.
First, those gulf states should have been evacuated immediatly. The oil is not refined, right, so coming out of the earth is mercury, and a bunch of other highly toxic metals and what not. Tens of thousands of people are on the water and on the beach trying to clean it up. There will be a "First Responders" tragedy where those people's livers and kidneys shut down. Next comes the cities where people are going about their business, yet breathing this air. Did I say millions? OK, well, I'll bring it down then...tens of thousands. Tens of thousands of people will die.
I think:
The Gulf oil spill is a significant, and likely long-term tragedy, (Duh!)
BP has been incompetent, (Double Duh!)
the Obama adminstration has been incompetent, (Infiniti Duhs!)
the economic effects of this disaster are greater than the market reaction, (What market are you talking about? My local shopping market? Hell, they're all pissed off as hell because they can't get oysters any more. If you are talking the stock market, then you must mean that the stock market hasn't discounted the fact that BP is collecting "cheap" oil from the surface of the Gulf of Mexico just as fast as their little ass can gather it and the stock market will go to new heights, don't you?)
the U.S. has to continue to drill in the Gulf, (Triple Duh! Somebody tells this to stupidass Obama)
Good guys involved in the oil spill = 0. (NOW YOU HAVE GONE TOO FAR REESE BOBBY. DIDN'T 14 PEOPLE DIE ON THAT WELL? I TAKE SERIOUS OFFENSE TO THE FACT THAT YOU DISCOUNT COMPLETELY THAT THESE MIGHT HAVE BEEN 14 GOOD GUYS AND THAT THERE ARE PROBABLY SOME VERY GOOD GUYS AT BP TRYING TO DO THEIR BEST TO CONTAIN THIS THING. On the other hand, if you are referring to BHO, then you are right, he ain't a "good guy" at all.)
nternational Adjusted Chapter 11 Czar....
I nominate lead counsel for UAW ;)
$20 MMM of debt maturing over 10 years is not a big deal for a company the size of BP. A year from now people won't remember. BP is not going under. UK gov't can't let it.
Pure capitalism + Smart Government is what works. Half assed or half time capitalism and a weak government will ruin your country.
In this case, the smart government has to step in. This is a disaster which 99.95% of us have little clue as to its extent and for how long this will impact us. We taxpayers cannot be the last people holding the bag and I'll be damned if I watch that happen again this time. It cannot, we are BROKE and on the edge here.
$35 billion is a low figure and I am talking PV. The seafood biz will be gone for 8-10 years. That is about $8 billion right there - all of these people will be in the cleanup (hell for them) business and they need new machines, training and equipment. And yeah, those people should be compensated directly from BP but that is not going to happen, we all fucking know that. It is a foreign oil firm. Domestic oil firms are bad enough. Sure BP and the others have an obligation to their shareholders wherever they are but our goverment, given the fact that WE ARE BANKRUPT, has an even deeper obligation that this does not add to the insane deficits over the next 10 years. It should not as this is not the taxpayers fault - it is not a natural disaster, act of war, etc. So the government has to step in. Next is tourism. For the five states, that will take another $15 billion over 5-7 years. Next is the cleanup itself including government response which again will be getting very expensive very quickly. These estimates range from $15-$25 billion over 8-10 years.
I will be the first to criticize the wasteful government bureaucracy that has very likely already ruined this country.... so Obama, if you are listening, you had better run this like a 300 year old Swiss bank:
Cut a deal with the Brits directly --- they hand over BPs US assets only. Do it now so that everyone can save time and cut out the Wall Street bankruptcy machine and its 25% cut. Sell the assets and create a fund - it would be about $50 billion - and coordinate all payments from there. BP survives without the unknown and is done in the Gulf, and in a $75 perbarrel world will go on to help British pensioners. If the fund, at the end of the day has leftover money, then it goes back to BP. Fair enough. If anyone sees graft or waste, then it is the fault of our President and he will have to reimburse the fund with taxpayer funds and then he or she will be out if that happens. If this were Exxon (unlikely), 50 miles from the British coast, then they should expect the same deal, as I would not expect the British taxpayers to pay for that either.
Shareholders take on at least 10 different types of risk when they hold stocks (as I have heard idiots plea for shareholders out there). Disasters of various types are on this list. You get paid for all these risks most of the time, that is how the capitalist system works. Somehow, with the help of the schizto, capitalist-some-times-and-leftist-other-times crowd this has not been happening. Prime example that I have railed about for two months: Goldman never should have recieved a $12 billion backdoor payment for taking on insane levels of counterparty risk but they ended up getting paid 100% on the dollar. That was disgusting.
When a company has a massive obligation from a disaster that it (and other firms likely) are reponsible for that it simply will not be paying willingly, then the government has an obligation to protect the taxpayers, again especially when the government has fucked up so many times in the last 45 years that it is now fucking broke.
Last, keep drilling going in the Gulf. Sure. It will be safer now than ever with execs wide awake to the risks. You screw up though, you done boyos. At $75 pb oil, margins are very wide so the message is, don't repeat this disaster and make your share. Listen to our drillers here on what new devices are needed and watch the subs closely. The goverment will have to spend money on new monitoring technology on its own and intercede when it has to - and take that out of the absurd defense budget. This is all far better than paying the fucking Arabs or the nut in Venezuela for oil.
So, this is a huge mess and it surely will quickly become the historical mother of all kluster fuck messes if this President does not a) stop the leak pronto, b) restore order in all respects c) do what is fair for the victims and d) does kick this can down the road to the next administration or try to bury the costs for political reasons by thinking for one fucking second that costs after say six months from now can somehow be added to the deficit. Damn you if that is done.
Finally, now that this may have sounded sane and logical except to the nutwings, none of this will happen ... because it is a Madhouse.
If BP can go bust, the largest oil company in the US, why would anybody drill offshore in the US ever again?
One accident and you are fucked. It doesn't matter how safe you think you are being, something like this could happen to your company and you will get sued to oblivion.
Why take the risk when you can move your rigs to Africa, Brazil or somewhere else.
The insurance companies are already starting to say that even a $10 billion cap on economic damages is too high and they wouldn't be able cover it. That would leave only the largest, self insured companies able to drill and they wouldn't want to take an existential risk. Better to not drill in the US and make money from the price of oil being higher.
This is why BP is not going down, because if they do it will make it far too expensive for any company to drill oil in the US ever again.
Maybe Leo has it right about those solar stocks?