By Vicki Needham - 06/18/10 02:37 PM EDT
Cost-cutting measures include the suspension of dividends, announced Wednesday by BP Chairman of the Board Carl-Henric Svanberg at the White House, as well as significant cuts in capital spending and an increase in planned divestments of $10 billion during the next year.
Still, the agreement over the escrow fund doesn't include a ceiling or a floor, and Moody's said "uncertainty over the ultimate cost for massive litigation claims and other contingent liabilities will be an overhang on BP's creditworthiness that will persist for years to come."
The markets seemed unflustered by the change, as BP has seen its credit rating downgraded already several times this month.
On June 3, Moody's cut BP's rating from Aa2 to Aa1 and Fitch Ratings cut BP's credit rating six notches on Tuesday. Standard & Poor's downgraded BP by two notches on Thursday, the second time this month it has lowered the company's rating.