Eni’s Rating Risk: Implications for Credit, Spreads: BI Video

Eni has lowered its leverage target range, but this may not be enough to bring cash-flow credit ratios back above the minimum requirement for its A- S&P rating if oil remains much below $70 a barrel. Shareholder distributions would decline with cash-flow under a low-oil scenario, but Eni may prove reluctant to slash growth capital spending in order to preserve credit quality. A downgrade from S&P would result in Eni's senior bonds moving to the BBB category indexes, from the A category, which could be a catalyst for spreads to widen from comparable levels to higher-rated peers such as BP.