Moody’s: HollyFrontier view to negative

Moody's Investors Service said it changed HollyFrontier Corp.'s outlook to negative from stable and affirmed its Baa3 senior unsecured and long-term issuer ratings.

These actions follow HollyFrontier’s Oct. 31 announcement to acquire Petro-Canada Lubricants Inc. (PCLI), a subsidiary of Suncor Energy Inc. (Baa1 stable) for about $845 million (or C$1,125,000,000).

HollyFrontier intends to finance the acquisition, expected to close in the first quarter of 2017, using a combination of debt and balance sheet cash.

"The negative outlook reflects our expectation of increased consolidated leverage in a period of weaker refining margins with the likely increase in HFC's debt levels to fund the PCLI acquisition," Moody's vice president, senior analyst Arvinder Saluja said in a news release.

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