...Strong Operational Performance: Valero Energy Corporation's (VLO) ratings are supported by the company's size, scale and asset quality as the leading North American independent refiner, with approximately 3 million barrels per day (bpd) of throughput capacity; modest but growing leverage to discounted North American shale crudes; ample financial flexibility; good FCF; reasonable debt levels; solid export capability out of the Gulf of Mexico; and higher distillate output following the completion of key hydrocracking projects. Credit Concerns: Rating concerns center on the high level of cyclicality that characterizes refining; an unfavorable regulatory environment in the U.S.; and the risk of the removal of the U.S. crude export ban, which would erode the feedstock cost advantage currently associated with the industry. Exposure to volatile renewable identification numbers compliance costs is also a concern. Increased Shareholder-Friendly Activity: VLO has increased its shareholder-friendly...
