Fitch raises Valero Energy

Fitch Ratings said it raised the issuer default rating and senior unsecured debt rating of Valero Energy Corp. to BBB from BBB-.

Fitch said it has also raised the rating on the mandatory convertible preferred securities to BBB- from BB+.

The outlook is stable.

The rating action recognizes the rapid reduction in debt following the acquisition of Premcor Inc. as balance sheet debt was under $5.4 billion at year-end 2005 from $6.4 billion at the end of the third quarter, Fitch said.

The agency added Valero continues to benefit from the size and diversity of its asset base and its significant leverage to heavy and sour crudes.

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