Moody's downgrades Sunoco rating

Moody's downgrades Sunoco long-term debt rating

Associated Press

NEW YORK (AP) -- Moody's Investors Service said Wednesday that it cut Sunoco Inc.'s long-term debt rating to so-called junk status, citing the petroleum refiner and seller's decreasing size and the reduced diversification of its offerings.The agency lowered the company's "Baa3" rating by one level to "Ba1," which is the highest non-investment grade level. Moody's said the ratings outlook for the company is "stable."Moody's noted that Sunoco has cut its crude refining capacity by 45 percent over several years, which lowers its costs but decreases its diversification, further concentrating operations in the "highly competitive" Northeast U.S. market.The agency said the dependence of the company's refineries on light crude products also hurt it competitively and financially, and past operational issues at the refineries could re-emerge and threaten their productivity."Moody's believes difficult market conditions will persist over the next years, hindering Sunoco's efforts to improve returns or find other options for the refining operations," the ratings service said in a statement.Moody's maintained its "Baa2" long-term debt rating and "stable" outlook on Sunoco Logistics Partners LP.

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