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BP Credit Rating Cut


Two major credit agencies have cut their rating on BP as the huge oil firm struggles to stop the worst oil spill in U.S. history.

Fitch Ratings and Moody's Investors Services each cut their assessment of BP's creditworthiness by one level. The Fitch rating dropped to AA from AA+, while Moody's moved to Aa2 from Aa1. The agencies say further downgrades are possible.

A lower credit rating means lenders will charge the company higher interest rates because of the greater concern their money will be paid back.

Since the April 20 explosion that killed 11 workers, BP has seen its stock price decline by more than 30 percent, wiping out tens of billions of dollars in market value.

The firm has spent about $1 billion trying to stop the leak and clean up the oil so far. It faces hundreds of millions of dollars more in costs to build sand barriers to keep the oil away from some areas of shoreline, as well as a criminal investigation and a flurry of lawsuits.

BP's problems and falling stock price have prompted speculation in the financial press that CEO Tony Hayward could be fired, or that the company might become the target of a takeover by industry rivals or other investors.

Some information for this report was provided by AP, AFP and Reuters.

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