ExxonMobil loses AAA rating: S&P ratings agency
New York (AFP)
Standard & Poor's stripped ExxonMobil of its triple A rating Tuesday, saying the oil giant's rising debt and weaker earnings outlook meant it no longer qualified for the highest designation.
The one-notch move, the latest ripple effect on the oil industry from crashing oil prices, leaves just two US companies with the triple-A designation, Microsoft and Johnson & Johnson.
S&P noted that ExxonMobil's capital debt has more than doubled in recent years as it executes a number of major exploration and production projects to increase oil and gas output.
The ratings agency also expects ExxonMobil to continue to return large sums to shareholders through dividends and stock buybacks, further pressuring its financial position.
"As a result, we expect leverage to remain weaker than levels consistent with a 'AAA' rating, and we believe that lowering ratings to 'AA+' is appropriate," S&P said.
S&P said the outlook for ExxonMobil is stable, reflecting the expectation that the oil company "will continue to follow moderate financial policies of low leverage and responsible capital stewardship."
© 2016 AFP