Fitch cuts BP

Fitch Ratings said it downgraded BP plc's long-term issuer default rating and senior unsecured rating to AA from AA+, respectively, and placed the ratings on Rating Watch negative. Fitch also said it affirmed BP's short-term issuer default rating at F1+. The ratings of BP Capital Markets plc's senior unsecured issues, which are fully and unconditionally guaranteed by BP, also were downgraded to AA from AA+ and placed on negative watch.

The downgrade reflects risks to both BP's business and financial profile that continue to increase following the Deepwater Horizon accident in the U.S. Gulf of Mexico, Fitch said.

The company has repeatedly failed to stop the resultant oil leak and has instead reverted to containment methods that are yet to be fully implemented and are subject to potential weather-related disruption, Fitch said.

The agency noted that the drilling of relief wells also poses risks and additional time may be required for them to be fully effective.

Also supporting the downgrades is the criminal and civil investigation that U.S. Attorney General has opened with respect to the oil spill that could have potential negative effect on BP's financial profile, the agency said.

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