BP raised $12 billion in new, "equity-like" debt
The shares of BP plc (NYSE:BP) are trading lower, last seen down 1.7% at $23.30. According to the Financial Times, the energy producer raised $12 billion in new debt with equity-like features and low interest rates in an attempt to buildup its balance sheet. This comes after BP announced a $17.5 billion write-down of its assets, and cut forecasts of its 2020 oil and gas prices.
BP stock has had a rough go of it on the charts, after several March bear gaps sent the equity to an all-time low of $15.51. Since then, BP has tacked on nearly 80%, earlier this month hitting a three-month peak of $28.57, before finally settling below the now resistant, $25-$26 level. Now down 42.6% year-over-year, BP stock is once again set to close below its 80-day moving average -- a trendline that the equity was only able to conquer briefly over the last few weeks.
Analysts are scattered regarding their position on BP stock. Of the 13 in coverage, four rate the equity a "buy" or better. Elsewhere, one calls it a "sell," another a "strong sell," and seven brokerages sport a lukewarm "hold" rating. Meanwhile, the 12-month consensus price target of $32.45 is a massive 36.9% premium to current levels, leaving plenty of room for downgrades and/or price-target hikes in the near future.
Lastly, shorts are exiting in droves, as short interest plummeted 21.7% in the last reporting period, and these positions make up less than 1% of BP's available float. Meanwhile, the stock’s Schaeffer’s Volatility Index (SVI) of 52% sits in the 28th percentile of all other readings from the past year. This means options players are pricing in relatively low volatility expectations at the moment.