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S&P cuts Shell rating on BG takeover

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12 July 2016

Shell’s credit rating has been cut by S&P because of its £35bn takeover of rival BG Group.

The rating agency said on Tuesday evening it would cut the international oil company from A+ to A.

S&P said in a statement:

The downgrade reflects our view that, despite management’s commitment to reduce debt after the $54 billion acquisition of BG Group, Shell’s credit metrics and discretionary cash flow will remain materially below levels commensurate with the previous ‘A+’ rating in 2016 and 2017, as we expect continuing low oil and gas prices.

Earlier this year, Fitch reduced its credit rating for Shell from AA to AA-.

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