Moody's ups Valero Energy

Moody's Investors Service upgraded Valero Energy Corp.'s senior unsecured rating to Baa2 from Baa3, subordinated debt rating to Baa3 from Ba1 and preferred stock rating to Ba1 from Ba2.

This concludes a review for upgrade that began on Feb. 8.

The outlook is stable

According to the agency, the upgrade reflects Valero's ample liquidity, large operating scale, regional margin diversification, sufficiently complex process configuration and sufficiently low leverage and sound cash flow coverage of capital spending during the downturn.

"In considering the upgrade, very strong consideration was given to Valero's plan to forgo large share repurchases in light of a long hiatus in its asset disposal program and a generally weak and uncertain sector outlook," Moody's analyst Andrew Oram said in a written statement.

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