Moody's rates Sunoco notes B1

Moody's Investors Service said it assigned a B1 (LGD 4) rating to Sunoco LP's proposed offering of $500 million senior unsecured notes due 2027.

The Ba3 corporate family rating, the Ba3-PD probability of default rating, SGL-3 speculative grade liquidity rating and stable outlook are not affected by this action.

The notes will be fully and unconditionally guaranteed by all of Sunoco's material domestic subsidiaries and are co-issued by Sunoco Finance Corp.

The proceeds of the proposed offering will be used to repay a portion of outstanding borrowings under the company's revolving credit facility, Moody's said.

The proposed $500 million senior notes are unsecured and guaranteed by substantially all of the company's domestic subsidiaries, the agency said.

The notes have a B1 rating, which is one notch lower than the Ba3 corporate family rating, reflective of their junior position relative to the priority claim of its $1.5 billion secured revolving credit facility, Moody's said.

As one of the largest distributors of motor fuels in the United States, Sunoco benefits from the strength of the Sunoco retail brand and the geographic reach and revenue stability accruing from the wholesale distribution of motor fuel, which has become its dominant business, the agency said.

Moody's said it believes the company will gain in size through acquisitions and economies of scale.

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