It's what comes after, and it will go on for years.
The panic around BP seems palpable Wednesday afternoon.
The shares fell more than 15%, to under $30, on worries the company planned to cut its dividend. The cost of insuring against default on BP’s bonds jumped. And prices for those bonds hit record lows, as rumors seemed to be swirling around about possible bankruptcy for the oil giant.
All this chatter reminded us of a note from the bond wonks over at Janney Montgomery Scott that we glanced at a couple days back, it was an analysis that tried to gauge how expensive the spill would have to get before it presented a threat to the solvency of BP or other firms that had a role in the spill.
“The results of this analysis suggest … that all four corporations have the capability to generate enough cash to withstand a very expensive total spill cost of $30 billion to $100 billion, albeit with a weakening in credit quality,” wrote Guy LeBas, chief fixed income strategist at the firm, in the note, published June 7....MORE