July 21 (Reuters) - Standard & Poors cut its rating on RoyalDutch Shell Plc by one notch to 'AA minus' from 'AA',citing a weaker financial risk profile, mainly due to soft oilprices, and continuing substantial capital expenditures.
The rating agency said the outlook on the company isnegative reflecting possible adverse effects on credit metricsif the large BG Group Plc acquisition is finalized.(http://bit.ly/1GzvDlE)
Shell announced in April that it has agreed to buy BG GroupPlc for about 47 billion pounds, making it the first oilsuper-merger in a decade.
The rating agency said the company's outlook could berevised to stable if the BG acquisition does not proceedfurther.
"Our rating on Shell does not factor in the BG acquisitionat this stage, since the deal is yet to close. We understandthat the acquisition is subject to numerous regulatory andshareholder approvals," the rating agency said on Tuesday.
However, the company's long-term and short-term ratings,which have been under CreditWatch since April, are removed.
Also, the rating on the company could be lowered further ifthe BG acquisition is finalized and further effects creditmetrics of the company, S&P said in the note.
The rating agency now anticipates a lower ratio of fundsfrom operations to debt over 2015 to 2017 and assess thecompany's financial risk profile as "intermediate" instead of"modest."
(Reporting by Rishika Sadam in Bengaluru)
