Ratings agency Moody’s Investor Services has changed ExxonMobil’s credit outlook to negative from stable – in part due to the “emerging threat” to fossil fuel companies from climate change regulation and tax, with the oil major also exposed to “rising” litigation risk linked to climate change and related disclosures.
The ratings action focused on negative free cash flow and rising debt levels at the oil major.
“ExxonMobil’s negative outlook reflects the company’s substantial negative free cash flow and expected reliance on debt to fund its large growth capital spending program,” said Pete Speer, Moody’s Senior Vice President. “We forecast debt to rise, despite some potential mitigation from asset sales, causing ExxonMobil’s credit metrics to weaken for the next few years.”
But Moody’s also warned that the negative outlook “also reflects the emerging threat to oil and gas companies’ profitability and cash flow from growing efforts by many n…