Standard & Poor's lowered the credit ratings Tuesday on about $6.9 billion in debt securities of Atlantic Richfield, citing its heavy borrowings and the risks posed by low oil prices that the credit-rating firm expects to prevail throughout the 1980s.
Though Standard & Poor's had some favorable things to say about Arco, the downgrading will have the effect of making it more costly for the nation's seventh-largest oil company to borrow money.
The chief rating change was to the A level from the previous AA, which means an assessment that Arco has a "strong" rather than "very strong" ability to repay interest.
The downgrading wasn't a surprise. Arco and numerous other oil companies have been on Standard & Poor's "creditwatch" list since April because of the collapse in world oil prices. The firm has lowered the credit ratings of about 24 oil companies this year.
Arco had no comment on the action.