For The First Time Since The Great Depression, Exxon Mobil Loses 'AAA' Rating

Tyler Durden's picture

Exxon Mobil has been rate AAA by S&P since 1930 according to Bloomberg. Today that ended as the global crude explorer with sales that dwarf the economies of most nations was cut to AA+ (Outlook stable). Having been put on notice in February (negative watch), citing concern that credit measures would remain weak through 2018.

Credit measures will be weak for a AAA rating due, in part, to low commodity prices, high reinvestment requirements and large dividend payments, S&P says.

 

Maintaining production and replacing reserves will eventually require higher spending, S&P says.

 

Greatest business challenge is replacing co.’s ongoing production, S&P says.

XOM stock is sliding and weighing on The Dow (back below 18,000).

As Bloomberg reports,

The oil-market crash that began in late 2014 has choked crude-producing nations like Nigeria and Venezuela of cash, thrown hundreds of thousands of employees out of work, stalled drilling and pipeline investments around the world and even reverberated into ancillary industries such as steel-making and railroads. Exxon was one of the last holdouts against the wave of credit downgrades that engulfed oil drillers with diminishing prospects of paying debts, dividends and rig fees.

 

The downgrade will not only raise Exxon’s cost to borrow money but may also erode its status among oil-rich governments as a premier partner with which to do business.

 

As Exxon Vice President of Investor Relations Jeffrey Woodbury said in February, the company’s AAA rating has been a key selling point when competing for drilling licenses.

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Hitlery_4_Dictator's picture

Off topic: Screw you landlords living on the backs of others, using the criminal bank / mortgage ponzi schmeme (even though you all say you are against it) to your advantage and helping to prop up the fradulent system. I find it amusing that Obama is now making it illegal for you landlords to deny people with criminal histories from beiung tenants. Pretty soon you'll be stuck with shitty boxes that are trashed and you can't afford to sell. LOL

LawsofPhysics's picture

You do realize it is all about location. There are in fact rentals in high end wealthy communities dipshit.

LOL indeed!!  You cannot "fix" stupid you dumb fuck. Yes, owning a rental in a crack neighborhood is indeed stupid, FUCK EM!

Hitlery_4_Dictator's picture

Hey, Obama and then Hillary will be moving section 8 houses into your wealthy communities, it's already been put into law and they are doing it across the country. Enjoy it while you can, LOL. Better think about lowing those rents now because it's soon to be inevitable. In the meantime why don't you start looking for a real job fag.

LawsofPhysics's picture

History is not on your side asshat.  The Hamptons has in fact survived two world wars and a great depression.

Lots of of other examples, I love it when morons like you comment. Not saying it's "right", just is what it is you stupid fuck, now evolve or die.

LMFAO!!!!!!


Hitlery_4_Dictator's picture

Obvioulsy idiot, where the elites reside will be exempt....talking about where common thousandaires and millionaires live. They will be destroyed, along with your precious rent.  All due to gentrification, while guilt and reparations. I love it when greedy scumfucks like you comment, thinking you are so smart.  You'll have the farthest to fall.

LawsofPhysics's picture

Comphrehension isn't your strong suit, I get it.  I don't pretend to be smarter than anyone else, I simply recognize the world for what it is.  What part of evolve or die do you think is inaccurate exactly.

Go ahead genus answer the fucking question, no shit, the serfs are always cannon fodder, God you are a fucking moron.  Thanks captain obvious.

That which cannot be sustained, won't be, period.

Or do you have a problem with that too you stupid fuck.

Again, LMFAO!!!!!!!!!!!

Hitlery_4_Dictator's picture

I live next to 75 thousand undeveloped acres in the middle of nowhere, I've evolved. I wish you the very best because soon cities, suburbs, rentals, and housing will all be destroyed. Yes, even well to do areas will be in complete dissary. I'd start evolving now if I were you, looks like your a bit behind the curve.

VarenneRiver's picture

Actually if I am not mistaken Laws is a 3rd generation farmer...I know because I argued with him once as well.

He's not behind the curve. You are both arguing apples and oranges. He gets it, you claim to get it.

Go walk in the woods/fields and get on with your day.

NoDebt's picture

"Pretty soon you'll be stuck with shitty boxes that are trashed and you can't afford to sell. LOL"

People who trash their own house, even if it's a rental always amaze me.  I mean, why don't you just burn it down so you don't have to pay rent any more if you feel that strongly about it?  Of course, your big screen ain't gonna work so good after the next rain storm, but those are the breaks, I guess.

ToSoft4Truth's picture

Buy a few buildings and rent them to the serfs.  Use the Check Cashing/Payday Loan store business models. 

 

Hint: buy shit motels and rent the rooms by the week. 

JamesNorman's picture

They are the first of many! The same exact thing happens everytime!  Once it becomes apparent that 90% of high priced big boards are soaked in gasoline and waiting for their turn to burn everyone will pile out and into lower priced emerging technologies, small and mid caps like every other crash in the past.  The way to make money is to get there first.  Watch the wealthy move their money around and follow the lead, this is my 3rd crash, made a killing on all of them.  Bill Gates and Jeff Bezos just dumped monster money into a lower priced Nasdaq emerging technology in early cancer detection.  If you are smart you will put some of your money in as well while knowone is looking   http://goo.gl/yQajjH

Don't Be A Moron This Time Around!  Learn From The Past!

zuuma's picture

"If you are smart you will put some of your money in as well"

Oh, sure. You're AMAZING! 
How bright & clever you are to "know" this valuable, get rich quick info.
How extrodinarily generous to share it with us in the dark types.
Retirement is saved, everyone!  Jump in!

Or... do you really mean thay YOU bought 10,000 shares at 2 cents each & need a bunch of rubes to get it to 3 cents?
Then your departure will be profitable, eh?

LawsofPhysics's picture

Ditto for bread. Fuck em Kaiser, we all know how this "let the majority eat cake" monetary experiment ends, let's get on with it already!

Kaiser Sousa's picture

i hear ya man...

thats the main reason i save in Silver & Gold...

thats my way of waging war against the sociopathic MoneyChanger pieces of shit...

its not just about Money........

LIBERTY.

Life of Illusion's picture

 

FED may need a few more downgrades before interested in purchasing.

 

LawsofPhysics's picture

With about a 20-30 day supply of crude in the current "glut", all these energy companies should just fuck right off and stop producing, then simply wait.

All the "mark to fantasy" bullshit by central bankers and their polical puppets has destroyed any remaining price discovery.  Do us all a favor and take the power back.  Fuck em.

KnuckleDragger-X's picture

They don't have near enough control to try that, and any collusuion would be very easy to spot......

LawsofPhysics's picture

Unless of course they simply said "fuck it", and stopped pumping, and retreated to their private estates.

That which cannot be sustained, won't be, period.  No matter how much people and their "representation" cry and whine about it.

KnuckleDragger-X's picture

Find out how many holes in the ground they actually own or control......

Theonewhoknows's picture

Wait until they will print to bail out/ take over the 'strategic sector'. You see whether they paint beautiful picture that economy is all dandy or they actually will have to admit that economy is in the gutter - then Janet will save the world and cut rates + QE. Both ways they win http://independenttrader.org/was-the-last-euphoria-the-harbinger-of-rate...

PT's picture

Okay, what did Exxon do to piss off S&P?

Bangin7PoundCocks's picture

I wouldn't feel bad for Exxon if the entire company was locked in an ISIS fire cage. They gloated and laughed as Americans suffered under the effects of price gouging for 7 years. Fuck off and die!

pods's picture

Well I think I can think of a few other companies who bear a BIT more responsibility for that fiasco than any oil producer.

I sit and wonder why gas prices go down like a sloth as oil drops yet when oil moves up a buck gas shoots up like a bottle rocket.

The moneychangers have ruined pricing mechanisms for almost everything.

Wherever they smell money they jam that blood funnel.

pods

LawsofPhysics's picture

exactly Fuck them and the fucking SHEEP that have allowed this to continue!

Hohum's picture

Not very effective gouging.  Much less profit per dollar of revenue than Apple, even during the good times.

Bangin7PoundCocks's picture

Don't spew that bullshit around here! I saw the talking points issued to all Exxon employees during the "boom" and that little nugget was number 1. $40 billion profit per quarter is still $40 billion. Fucking company man!

Hohum's picture

Mr. Cock,

Read what  I wrote.  It's true and you're not contradicting it.  In a world of 90+ million barrels per day, revenue is immense.  Look at Apple and XOM in 2012 and see if the statement is false.

 

2015 Apple revenue: 233.7 B and net income 53.3 B

2015 XOM revenue: 268.9 B and net income 16.2 B (Wikipedia)

just the tip's picture

hussein?

hussein, is that you?

you dumbmotherfucker walk to work.  and die yourself.

exxon pays more in taxes than it makes in profit.  that is not a talking point you shit for brains motherfucker.  and it has done that for more than your seven fucking years.

fuck you.

_ConanTheLibertarian_'s picture

They have been exxiled

PT's picture

"Hey dad!  Can I borrow the keys to the money-printer?"
"Okay son, but make sure you don't over-borrow it, and make sure you put some revenue in the tank, and be home by midnight."

Colonel Klink's picture

Awwww, couldn't have happened to a nicer corporation.  Hopefully BP will be next.  Apparently they're having another spill, of their reputation.  BP next with a blowout.

I'm sure they're just doing God's work too.

me or you's picture

You haven't heard about Apple yet. 

Colonel Klink's picture

You haven't heard about CRApple yet?

FIFY

Hohum's picture

In twenty years, XOM will be a GSE.

Colonel Klink's picture

AKA, a government sanctioned monopoly...like FMNA/FHLMC.  Look where those are at now.

Peak Finance's picture

This:

In twenty years, XOM will be a GSE.

I think since 2008 nearly every large corporation is now a GSE

Whats the real line (Effectively I mean) between a huge corporation like XOM and a GSE? If you are in an industry that operates while being monitored by at least 4 government agencies at all time (SEC, EPA, BLM, BMM, etc), with 100,000 pages of regulations, and needing a permission slip to turn onver a rock on your own exploration lands, who really runs the company now? 

 

 

ToSoft4Truth's picture

I think a 'wage-shock' is coming.

 

Either have all your stuff paid off, or owe the maximum you can.... and hope you don't get stuck paying it back. 

LawsofPhysics's picture

Wage, priced in what exactly...

It will be much worse.  Specifically, global Weimar.

All Risk No Reward's picture

>>global Weimar.<<

Not until their is a debt-bust that transfers the assets of the monetary illiterate producer class to the debt-money mathematics literate class's corporate front structure.

If you think these demon spawns are going to print debt-free to bailout the Uber-indebted Muppets then I suggest you have some more thinking to do on the subject.

Debt-free money will only be printed to benefit Debt-Money Monopolists and their mega-corporate fronts.

Osmium's picture

What am I missing here?  XOM is green for the day.

Boing_Snap's picture

Just caught a bit on Bloomberg on this topic, what was really shocking was that the US has on 2 companies with a AAA rating, and only 2 with AA+. Would never have thought about it, it makes you wonder how close are the majority of stocks to being Junk?

Mr. Bones's picture

Grade inflation is also happening on college campuses.  Media ratings, etc.  The only place we don't see inflation is on govt reports.  Exxon can't be the only corporation that fits their reason for downgrading, so why did they actually do it?

 

Lostinfortwalton's picture

I have it in my retirement accounts. It is up half a point today and pays 3.2 percent dividend at the current price

palmereldritch's picture

Ironically with all this crude surplus there is a liquidity shortage:

http://economictimes.indiatimes.com/news/international/business/saudi-ar...

Must be the inefficient central planned private ponzi currency that's gumming up the works...and this will improve KSA's economy how?

I think I've seen those cash for oil kiosks at the mall...

no ita lever's picture

This is why it is taking so long to unwind my good people, as you can see this one American company dwarfs many nations fiscally. America has a lot of money to burn through before we see real trouble.

I cannot see anything but a capitulation, of DEBT globally. Default if you want it to be organized, chaos if allowed to just crash, either way, they just can't stop it now. Could take 24 months or 5 years, who knows.

YBIC

surfvin's picture

Exxon does not believe in man made global warming,and they just told their shareholders to vote down global warming bullshit the climate zombies are trying to saddle them with. That explains the downgrade.