Moody's upgrades Sunoco

Moody's Investors Service said it upgraded Sunoco LP's (SUN) corporate family rating to Ba2 from Ba3, its probability of default rating to Ba2-PD from Ba3-PD and its senior unsecured notes rating to Ba3 from B1. Sunoco's speculative grade liquidity rating remains SGL-2.

"The upgrade reflects Sunoco's ability to grow margins and EBITDA by wringing costs out of its business, despite pandemic-driven demand declines for gasoline and diesel in 2020 and only partial recovery in 2021," said John Thieroff, a Moody's analyst, in a press release.

"These improvements and continued volume growth have allowed SUN to reduce debt leverage to about 4.5x on a Moody's-adjusted basis, a level we believe is sustainable and consistent with the Ba2 CFR."

The agency said it also revised the outlook to stable from positive, indicating a gradual recovery in demand for motor fuels and adjusted leverage of around 4.5x.

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