S&P lifts Tesoro from junk

S&P said it raised its corporate credit rating and senior unsecured issue-level rating on Tesoro Corp. to BBB- from BB+ and removed the ratings from CreditWatch, where S&P placed them with positive implications on Nov. 18, 2016.

The outlook is stable.

At the same time, S&P raised the corporate credit ratings on Western Refining Inc. and operating subsidiary Northern Tier Energy LP to BBB- from B+ and removed the ratings from CreditWatch with positive implications. S&P also raised its senior secured and senior unsecured debt ratings on Western to BBB- from B+ and B, respectively, and the senior secured debt rating on Northern Tier to BBB- from BB- and removed the ratings from CreditWatch with positive implications.

S&P subsequently withdrew its BBB- corporate credit ratings on Western and Northern Tier at the issuer's request. The agency also withdrew its BBB- issue-level ratings on the companies because all of their debt was repaid at close.

“The stable outlook reflects our expectation that Tesoro will successfully integrate the Western Refining acquisition, continue to drive operational improvements, and enhance margins at its refineries while not meaningfully increasing consolidated financial leverage beyond current levels,” said S&P credit analyst Michael Grande in a news release.

“We also believe the company will continue to manage the effects of carbon tax regulation on its business, expand and diversify its midstream business, and maintain ample liquidity.”

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