Eni’s Strategic Update Changes Credit Trajectory: BI Video

Eni has about 7% of production at risk from closure of the Strait of Hormuz, plans to increase the upper limit of its shareholder payout ratio and still has a negative on its A- rating from S&P as credit ratios have limited headroom to weather a low oil price scenario. However, spending cuts under the new strategic plan have reduced the dividend break-even oil price to $45, the leverage target range has been lowered to 10-15% through 2030 and there's scope for further near-term debt reduction if oil prices exceed the $70 planning scenario and Eni front-loads its divestment plan. Paul Vickars, senior credit analyst at Bloomberg Intelligence, discusses the implications for credit quality and bond/hybrid spreads in this short video.