Fitch: Sunoco unchanged

Fitch Ratings said it does not expect the ratings on Sunoco Logistics Partners LP and its operating partnership, Sunoco Logistics Partners Operations LP, to be impacted by news that Sunoco, Inc.'s intends to sell or idle its two remaining refineries by July 2012.

If Sunoco were unable to sell its Philadelphia and Marcus Hook refineries and they were idled, Fitch said it expects the potential negative financial impact to be limited to 5% of Sunoco Logistics' expected annual EBITDA.

Prior to Sunoco's announcement, Fitch had been expecting Sunoco Logistics' long-term debt-to-EBITDA ratio to average less than 3.5 times (x) through 2013. Although Sunoco Logistics' debt-to-EBITDA ratio would weaken slightly if Sunoco's refineries were idled, the impact on its own would not be material enough to affect ratings.

Sunoco Logistics' supportive financial credit metrics and relatively conservative distribution coverage, which has averaged about 1.5x over the previous three years, should provide adequate cushion for the possibility of a 5% reduction in EBITDA.

In addition, Fitch would expect management to adjust its capital structure as necessary while funding future expansion projects to maintain its current level of financial strength.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.