Fitch rates Delek US BB-

Fitch Ratings said it assigned a first-time long-term issuer default rating of BB- to Delek US Holdings, Inc. Fitch also gave BB+/RR1 ratings to the senior secured revolving credit facility and BB+/RR2 ratings to Delek's senior secured term loans. The outlook is negative.

“Delek's ratings reflect its medium size with 302,000bpd of nameplate capacity, material diversification into non-refining businesses and resulting integration, location-advantaged assets near the Permian basin and Gulf of Mexico, and expected conservative financial policy prioritizing liquidity preservation over shareholder returns. These credit strengths are tempered by relatively low asset complexity, small scale, geographic concentration within PADD III, redetermination risks around its revolver, volatile commodity pricing and crack spreads, and an unfavorable regulatory environment, including RINs exposure,” Fitch said in a press release.

The outlook reflects the risk that the refining sector demand profile will be weakened for an extended period, and uncertainty around Delek's potential renewable identification numbers exposure in case the EPA does not renew its small refinery exemptions, the agency said.

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