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Moody’s shifts Sunoco view to positive
Moody’s Investors Service said it changed Sunoco LP’s outlook to positive from stable while affirming its Ba3 corporate family rating, Ba3-PD probability of default rating and its B1 senior unsecured notes rating. Sunoco’s speculative grade liquidity rating was upgraded to SGL-2 from SGL-3.
“Higher margins are offsetting somewhat lower wholesale motor fuels distribution volumes, enabling SUN to generate modest earnings growth and positive free cash flow,” commented Andrew Brooks, a Moody’s vice president, in a press release. “As a result, SUN’s leverage metrics are strengthening, an improvement Moody’s believes will remain achievable on an ongoing basis.”
The company used the proceeds from November’s notes offering, cash and revolver borrowings to fully fund a tender and redemption of its $1 billion of 4 7/8% notes due 2023 as of Jan. 15. On Sept. 30, $87 million was outstanding under its secured revolving credit facility,
“Moody’s regards SUN as having good liquidity as indicated by its SGL-2 speculative grade liquidity rating, principally a function of its $1.5 billion secured revolving credit facility,” the agency said.
The outlook is positive.
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