S&P ups Sunoco debt, rates notes BB-

S&P said it raised the issue-level rating on Sunoco LP's senior unsecured debt to BB- from B+ and revised the recovery rating to 3 from 5.

At the same time, the agency assigned a BB- issue-level rating to Sunoco and Sunoco Finance Corp.'s proposed senior unsecured notes due 2023, 2026 and 2028. The 3 recovery rating reflects an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery if a payment default occurs.

The BB+ issue-level rating and 1 recovery rating on the partnership's senior secured notes are unchanged.

The 1 recovery rating indicates an expectation of very high (90%-100%; rounded estimate: 95%) recovery if a default occurs.

The partnership intends to use the net proceeds from the note offering, together with the consideration it receives from the pending 7-Eleven transaction, to fully redeem all of its existing senior unsecured notes, repay and terminate its existing senior secured term loan A, repay a portion of outstanding amounts under its revolver, redeem all its series A preferred units and fund the repurchase of a portion of its outstanding common units.

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