OIL

BHPB raising cash, falling oil price hits stock

Resource giant, BHP Billiton is looking to raise cash after National Australia Bank, UBS Warburg Australia and Westpac Institutional Bank announced this week the launch of a multi tranche Australian dollar, medium term note issue for BHPB.

However, despite a successful investor roadshow that took in Brisbane, Melbourne and Sydney last week, analysts have downgraded their earnings' expectations for the resource giant as demand for commodities slides along with the slowing global economy.

BHPB's share price went below the $10 mark to close at $9.63. The slump in oil prices was the main factor in the fall. Last week the price of crude fell to a two year low of $17.45 a barrel after non-OPEC nations such as Russia refused to cut production.

Oil analysts wound back earning expectations of BHPB after factoring in average crude price of $US20 bbl rather than the previous number of $US21.50 bbl.

The deteriorating oil price has not affected the company's credit rating. The resource giant is rated A (positive outlook) by Standard and Poor's and A3 (positive outlook) by Moody's Investor Services.

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