Bulletin: Sunoco L.P. Ratings Unaffected By Sale Of Stores To 7-Eleven Inc.

NEW YORK (S&P Global Ratings) April 6, 2017--S&P Global Ratings said today its corporate credit rating and outlook on Sunoco L.P. (BB-/Negative/--) are unaffected by the partnership's announcement that it has entered into a definitive agreement to sell about 1,110 convenience stores to 7-Eleven Inc. for $3.3 billion in cash, plus fuel, merchandise, and other inventories at close. The partnership also announced a 15-year take-or-pay fuel supply agreement with 7-Eleven under which Sunoco will supply about 2.2 billion gallons of fuel annually. We view the transaction as a meaningful step that will help Sunoco repair its balance sheet and improve its financial profile, because we expect most of the sale proceeds will go toward debt reduction. The partnership is targeting

...NEW YORK (S&P Global Ratings) April 6, 2017--S&P Global Ratings said today its corporate credit rating and outlook on Sunoco L.P. (##-/Negative/--) are unaffected by the partnership's announcement that it has entered into a definitive agreement to sell about 1,110 convenience stores to 7-Eleven Inc. for $3.3 billion in cash, plus fuel, merchandise, and other inventories at close. The partnership also announced a 15-year take-or-pay fuel supply agreement with 7-Eleven under which Sunoco will supply about 2.2 billion gallons of fuel annually. We view the transaction as a meaningful step that will help Sunoco repair its balance sheet and improve its financial profile, because we expect most of the sale proceeds will go toward debt reduction. The partnership is targeting total leverage in the 4.5x-4.75x range and a long-term distribution coverage ratio of 1.1x. We will continue our due diligence and discussions with Sunoco's management team to gain a better understanding of the partnership's...

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