Research Update: Sunoco L.P.'s Proposed Notes Rated 'BB-' (Recovery Rating: '3')

U.S. midstream energy partnership Sunoco L.P. announced a private offering of senior unsecured notes due 2027. Sunoco Finance Corp., a wholly owned subsidiary, is a co-issuer of he notes. Sunoco intends to use the net proceeds from this offering to repay a portion of outstanding borrowings under its $1.5 billion revolving credit facility. We are assigning our 'BB-' issue-level rating to the proposed notes. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. Our 'BB-' issue-level rating and '3' recovery rating on the partnership's existing senior unsecured notes is unchanged. The stable outlook reflects our belief that Sunoco's leverage will generally be at the lower end of its

...+ U.S. midstream energy partnership Sunoco L.P. announced a private offering of senior unsecured notes due 2027. Sunoco Finance Corp., a wholly owned subsidiary, is a co-issuer of he notes. + Sunoco intends to use the net proceeds from this offering to repay a portion of outstanding borrowings under its $1.5 billion revolving credit facility. + We are assigning our '##-' issue-level rating to the proposed notes. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. + Our '##-' issue-level rating and '3' recovery rating on the partnership's existing senior unsecured notes is unchanged. + The stable outlook reflects our belief that Sunoco's leverage will generally be at the lower end of its 4.5x-4.75x guidance range and distribution coverage will be in the 1.3x area. We also expect Sunoco will continue to implement its strategy to expand it fuel distribution business while adding fee-based logistics assets...

Research Update