S&P cuts Mapco

Standard & Poor's said it lowered its ratings, including the corporate credit rating, on Mapco Express Inc. to B from B+.

The outlook is stable.

The agency said that the downgrade reflects weaker-than-expected operating performance in the company's third quarter, resulting from significantly lower margins on retail fuel sales, which fell to 0.152 dollars per gallon from 0.207 dollars per gallon in the same period in 2006.

Overall sales were up in the quarter by 19.7%, primarily as a result of the inclusion of stores purchased in the acquisition of Calfee Co. earlier this year, but EBITDA was down about 8.3%, the agency added.

According to S&P, the ratings reflect Mapco's participation as a relatively small regional player in the competitive and highly fragmented convenience store industry, its significant exposure to the volatility of gasoline prices and its concentration in a few key markets in the Southeastern United States, where economic slowdowns can affect operations.

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