Shell Boosts Payout: Implications for Credit, Spreads (video)

Shell has tweaked its strategy to divert capital back to oil and away from renewables, which it expects to boost underlying free cash-flow growth to more than 10% a year. The positive impact on credit ratios may be dampened, however, as the shareholder payout ratio has been increased to 40-50% of cash-flow and Shell has abandoned its policy to maintain 'AA' category credit ratios through the cycle. How does this change the outlook for leverage, credit quality and bond spreads? Paul Vickars, senior credit analyst, discusses the key drivers in this short video. Read his updated credit primer here.