Moody’s assigns Sunoco notes Ba3

Moody's Investors Service said it assigned Sunoco LP and co-issuer Sunoco Finance Corp. a Ba2 corporate family rating, Ba2-PD probability of default rating and a Ba3 rating to its proposed offering of $800 million senior unsecured notes due 2023.

The agency also assigned an SGL-3 speculative grade liquidity rating.

The outlook is stable.

Proceeds will be used for acquisition financing and to repay borrowings outstanding under Sunoco’s revolving credit facility.

"This inaugural notes issue continues the process of financing the separation of the retail motor fuels business from Energy Transfer Partners, LP (ETP, Baa3 stable) acquired in 2012's Sunoco, Inc. transaction, and doing so in a tax-efficient manner," Moody's vice president Andrew Brooks said in a news release.

"While a planned sequencing of asset dropdowns into SUN adds to the structural complexity of this newly re-constituted master limited partnership (MLP), the geographic reach, extensive scale and prospectively improving credit metrics are supportive of the assigned Ba2 rating."

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