A short-term loan comes in handy for numerous people for unexpected expenses such as car repair, a crown at the dentist or a traffic ticket. But when you are responsible for the 2010 oil spill within the Gulf of Mexico, a short-term loan comes in handy — in spades. Oil giant BP is talking with banks to raise about $ 5 billion in short-term loans to help finance liabilities arising from the oil spill within the Gulf of Mexico, the Financial Times newspaper reported Thursday. By the end of last week BP had already raised about $ 20 billion in cash and credit to tackle costs from the spill.
Post resource: BP looks for short-term loan to cover costs in oil spill cleanup by Personal Money Store
Unsecured loans are easy to determine, unless you are BP
For most, getting a short term personal loanis easy. With online research reasonable rates could be found, but if you run an oil company with a criminally negligent sales record that’s trying to purchase its way out of an epic economic and environmental disaster it is a little tougher. Investment Week reports that in seeking its $ 5 billion in short-term loans, BP is having to pay more than commonly charged by banks in margins and fees, people close to the transactions said. In this deal, the banks are the ones holding the cards. BP, regardless of how big and rich it has become, will soon be desperate for cash. As the gusher continues to spill, banks have grown more concerned over the potential size of BP’s liabilities — so they’re going to hold the oil company over a barrel.
BP wants instant cash
A short term loan or a payday loans no fax provides the instant cash most people have to stop things like missing a credit card payment, preventing a bank overdraft fee, or simply getting the car out of the shop to get to work. But BP certainly has a bigger problem on its hands. To solve it, according to Reuters, BP is looking at various debt-financing opportunities, which consist of extending bank credit lines as much as $ 7 billion. The oil spill company had considered a corporate bond offering and additional asset sales. But those ideas are on hold for now. Even though it is angling for short-term loans, BP has said it has enough cash resources to meet oil spill cleanup costs without having to turn to these options.
More than just one short term loan is needed by BP
A short term loan or paydayloans for emergency money solves their financial dilemma and they move on. BP costs are likely to continue to mount higher. The Street reports that BP said this week the costs of cleaning up the oil spill within the Gulf of Mexico had reached $ 2.65 billion. This figure, which will continue to grow, is already more than $ 300 million more than its estimate from the week before. On June 16, BP agreed to create a $ 20 billion fund to compensate for the environmental and economic damage being wrought by the oil spill.
BP needs to find a way to get debt management
Nobody really seems to know if $ 20 billion could be enough money. The Associated Press reports that on July 1 BP’s oil spill became the largest-ever within the Gulf of Mexico. Its damaged oil well has been pumping out oil for about two and a half months now, which has now surpassed the formerly record-setting 140 million gallons spilled by the Ixtoc I spill near Mexico’s coast from 1979 to 1980. It’s doubtful that BP’s short term loan strategy could be even close to enough to deal with the long-term debt that lies ahead for the Gulf of Mexico.
Find more details here:
Investment week
investmentweek.co.uk/investment-week/news/1720119/bp-raise-funds-papers
Reuters
reuters.com/article/idUSTRE65G44C20100617?type=ousivMolt
The Street
thestreet.com/story/10796965/1/bp-in-short-term-finance-talks.html?cm_ven=GOOGLEFI
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