Santos shares have taken hits not only from the oil price tumble but also from a Standard and Poor’s move to downgrade Santos’s credit rating from BBB+ to BBB.

Santos said the new facility with ANZ would significantly enhance its liquidity profile and financial flexibility at “attractive funding costs”.

Santos chief financial officer Andrew Seaton said that the facility further strengthened its conservative liquidity profile.

“This facility provides a substantial buffer over and above the company’s funding needs in the current uncertain oil price environment,” Seaton said.

Macquarie said Santos could also need to address an estimated funding gap of $1.7 billion in 2015 to maintain a BBB- or better score.

However, the broker also noted that S&P has “repeatedly hinted” it could look past funding issues over 2015 and 2016 in future ratings assessments.

“If S&P does look through to 2017, Santos’ funding position looks considerably more comfortable,” Macquarie said – before Santos announced the $1 billion bilateral bank facility.

“Indeed by this time, we estimate oil prices would need to fall to $US60 a barrel to test Santos’ investment grade status.”

Macquarie also questioned the importance of the S&P rating.

“While slipping below BBB- would make new debt issues more expensive, we note that Santos only has debt maturities of $A1.3 billion prior to 2017 (out of about $9 billion in existing facilities),” the broker said in its latest report on Santos.

“Consequently, in the absence of [Gladstone LNG] pipeline sales (which are presumably being considered) surely it has to be better to let the rating slip (incurring higher rates on modest medium term debt re-financings) rather than contemplating a heavily discounted equity raising in order to preserve the rating.

“Especially as this rating brings few operational or financial rewards before 2017 (by which time, with rising cash flow, the rating would take care of itself).”

Santos has ruled out equity raisings for the time being although it has flagged that asset divestments are under consideration.

This has resulted in speculation it could market the GLNG gas transmission pipeline especially after the higher than expected recent sale of the Queensland Curtis LNG project pipeline.

“Management has clearly been caught off guard by the falling oil price,” Macquarie concluded as it maintained an outperform rating on Santos shares.

“What’s more, current actions instil limited confidence (capital expenditure plans were cut just two weeks after being announced while the progressive dividend is likely to be cut before its first round of progression).

“That said, while the market is understandably nervous, it continues to appear that Santos can scrape through without an equity raising particularly if it sells any of its pipelines).

“However, this approach leaves Santos uncomfortably exposed to further oil price weakness or slippage at GLNG.”