Analyst Insight: BP Plc's Credit Rating Cut by Fitch (NYSE:BP)

Fitch Ratings cut BP Plc's (NYSE:BP) credit rating Tuesday to two above "junk" due to the mounting costs of the clean-up in the Gulf of Mexico oil spill, as well as the company's ability to meet future liabilities, according to a Bloomberg report.

The company's long-term issuer default and senior unsecured ratings were downgraded from AA to BBB, following a June 3rd reduction from AA+, said Fitch officials in a statement.

President Obama, along with U.S. lawmakers, have cautioned BP this week that the company needs to suspend dividends and immediately put money aside for legal issues that will most likely surface as a result of the worst oil spill in U.S. history.

Fitch officials said they would be "surprised" if BP did not suspend its quarterly payout until the full monetary damage is clear; analysts expect the clean-up costs and pending liabilities to cost up to $40 billion.

A Fitch statement read: "The recent claims by U.S. state and federal authorities that BP escrow significant sums preemptively, ahead of any agreed claims process, represent a material change in approach."

BP already has an estimated $23 billion in debt, according to data by Bloomberg.

Shares of the company are trading down 1.47% Tuesday afternoon at $30.22.