Is BP Junk?

There's still a ton of uncertainty about how much the oil spill will cost BP, with estimates ranging from a few billion dollars into the tens of billions.

How much oil has spilled? Nobody knows — but it's probably more than initial estimates suggested. Will BP will be on the hook for the salaries of workers idled by the drilling moratorium? That may be subject to debate, Reuters reports.

BP's stock has been falling steadily since the spill. But in the past few days, investors have gone into a mode that one investment manager calls "Get me out of here now."

A few key data points:

Shares of BP fell 16 percent in the U.S. yesterday, and opened lower in London today.

Bond investors are treating the treating the company's debt like junk. The yield on BP's bonds is higher than the average yield for junk bonds, Bloomberg News reports. Yet BP's debt is still rated as investment grade — a sign that ratings agencies believe the company is likely to repay its debts.

The cost of insuring BP's debt against default has more than doubled over the past two days, Bloomberg says. It now costs $734,000 to protect $10 million of BP debt for one year. On April 30, the cost was $29,000.

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