Research Update: Sunoco L.P. Upgraded To 'BB' From 'BB-', Outlook Stable; Debt Ratings Raised

U.S. midstream energy master limited partnership Sunoco L.P. continues to deliver solid financial performance, supported by strong wholesale fuel margins and complementary tuck-in acquisitions. We forecast that Sunoco's balance sheet and credit measures will continue to improve. We raised our issuer credit rating on Sunoco to 'BB' from 'BB-'. The outlook is stable. In addition, we raised our rating on the senior secured debt to 'BBB-' from 'BB+'. The recovery rating is '1', indicating our expectation for very high (90%-100%; rounded estimate; 95%) recovery in a payment default scenario. We also raised our rating on the senior unsecured debt to 'BB' from 'BB-'. The recovery rating is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in a

...- U.S. midstream energy master limited partnership Sunoco L.P. continues to deliver solid financial performance, supported by strong wholesale fuel margins and complementary tuck-in acquisitions. We forecast that Sunoco's balance sheet and credit measures will continue to improve. - We raised our issuer credit rating on Sunoco to '##' from '##-'. The outlook is stable. - In addition, we raised our rating on the senior secured debt to '###-' from '##+'. The recovery rating is '1', indicating our expectation for very high (90%-100%; rounded estimate; 95%) recovery in a payment default scenario. - We also raised our rating on the senior unsecured debt to '##' from '##-'. The recovery rating is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in a payment default scenario. - The stable outlook reflects our view that the partnership will maintain S&P Global Ratings-adjusted financial leverage below 4.5x and ample liquidity as it continues to look for additional...

Research Update