S&P boosts Sunoco

S&P said it raised its issuer rating on Sunoco LP to BB from BB-, its senior secured debt to BBB- from BB+ and its senior unsecured debt to BB from BB-. The secured debt’s 1 recovery rating, indicating very high (90%-100%; rounded estimate; 95%) recovery in default and the unsecured debt’s 3 recovery rating indicating meaningful (50%-70%; rounded estimate: 60%) recovery in default are unchanged.

“Sunoco has been able to capitalize on its position as one of the largest fuel distributors to improve operating efficiencies and benefit from the higher fuel margins during the last two years. Sunoco averaged slightly more than 11 cents per gallon (CPG) margin in 2021, which is better than pre-Covid-19 historical margins in the 9-10 CPG range. We believe margins could moderate in 2022 but likely will remain robust in the 10.5-11.5 CPG area,” the agency said in a press release.

S&P said it forecasts Sunoco delivering EBITDA at higher end of the $770 million-$810 million range for 2022.

The outlook is stable.

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