Fitch rates HollyFrontier, notes BBB-

Fitch Ratings said it assigned a long-term issuer default rating of BBB- to HollyFrontier Corp. and a rating of BBB- to its senior unsecured notes.

The outlook is stable.

Roughly $1 billion of debt, excluding non-recourse debt at HollyFrontier's affiliated logistics MLP Holly Energy Partners, is affected by this action.

Fitch said the BBB- rating reflects HollyFrontier's advantaged refining locations that provide access to discounted inland crudes, conservative financial policy, robust liquidity and the diversification benefits from its recently acquired high margin lubricants business (PCLI), as well as distributions from its stake in its logistics MLP, Holly Energy Partners (HEP).

HollyFrontier has a 35% LP interest in HEP, as well as a 2% general partner interest. Concerns include the company's relatively small size, including smaller average throughput capacity of its refineries, the historical volatility of the refining sector, increased gross debt due to the PCLI lubricants acquisition, and exposure to volatile Renewable Identification Numbers (RINs) costs.

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