S&P lifts Santos to stable

S&P said it revised the outlook on Santos Ltd. to stable from negative.

The agency also said it affirmed the BBB- long-term and A-3 short-term corporate credit and issue ratings on Santos and the company's related debt.

The outlook revision reflects a view that Santos' financial profile will improve following the company's proposed equity raisings, S&P said.

The company will raise A$1.04 billion equity from new and existing institutional shareholders, which represent 15% of Santos' issued capital, the agency said.

Santos also proposed raising up to an additional A$500 million equity from its retail shareholders, although this is not underwritten and less certain, S&P said.

The amount of this additional equity raising will be known in late January 2017, the agency noted.

The equity raisings demonstrate the company's commitment to maintaining a BBB- rating, S&P said.

The new equity also enables the company to improve its credit metrics and further strengthen its capital structure, the agency said.

However, risks remain for the operations of one of its plants and the constraints on capital expenditures have slowed the ramp-up of production of equity gas at this location, S&P said.

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