Fitch downgrades Sunoco

Fitch Ratings said it downgraded Sunoco, Inc.'s issuer default rating, senior unsecured credit facility and senior unsecured debt to BBB- from BBB, its subordinated notes to BB+ from BBB- and its commercial paper and short-term issuer default rating to F3 from F2.

The outlook was changed to stable from negative.

The agency said the downgrade stems from early evidence of a weak 2010 driving season that is expected to mute profits across the refining sector as well as Sunoco's limited ability to absorb additional refining capacity cuts without additional deleveraging.

The ratings remain supported by the company's refining and retail base, strong market position in the Northeast, diversified portfolio of non-refining businesses and historically conservative credit profile, Fitch said.

Ratings concerns center on the duration of the current downturn and its impact on transport fuel demand, the coke business' concentrated counterparty exposure to steel and, over the longer term, Sunoco's limited feedstock flexibility as a light, sweet crude oil refiner, the agency said.

The debt-to-EBITDA ratio was 4.12 times as of Dec. 31.

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