Moody's affirms United Refining

Moody's Investors Service said it affirmed the B3 senior implied and B3 note ratings for United Refining following the company's announced $25 million senior unsecured add-on to the company's existing $200 million senior unsecured guaranteed notes.

The add-on offering will be used to repay bank borrowings utilized for working capital needs, freeing up needed liquidity in the face of very high crude oil prices.

Moody's said the ratings remain restrained by the inherent volatility of United's earnings and cash flow, the significant aggregate carveouts permitted in the indenture, historical distribution trends to the controlling shareholder, United's single refinery status, high debt levels, increased working capital requirements due to high oil prices and a need for more direct monetary support from the Red Apple Group, its shareholder.

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