BP PLC, the target of more than 220 lawsuits over the Gulf of Mexico oil spill, is seeking at least $5 billion in bank financing to meet compensation payments, according to two bankers approached by the London company.
BP has asked lenders for one-year credit lines, one of the people said. It is arranging the transactions individually with banks, said the people, who declined to be identified because the talks are private.
The financing is in addition to BP's $10.5 billion of undrawn lines, the people said.
The funds may give BP additional flexibility if borrowing in bond markets becomes too expensive after the company's debt was cut six levels, to BBB from AA, by Fitch Ratings on June 15.
Sheila Williams, a spokeswoman for BP, declined to comment on financing arrangements.