Fitch applies BBB to Valero notes

Fitch Ratings said it assigned a BBB rating to Valero Energy Corp.’s pending issuance of senior unsecured notes 2028 notes.

The company expects to use net proceeds to fund the redemption of its $750 million 9.375% senior notes due in 2019, as well as for general corporate purposes.

Fitch said the ratings reflect Valero’s size and scale as an independent refiner (15 refineries and about 3.1 million barrels per day (bpd) of refining capacity, the largest independent refiner outside of the pending Marathon Petroleum Corp.-Andeavor merger); its strong refining asset quality, which is well positioned to benefit from pending fuel specification changes associated with IMO regulations; the diversification benefits from non-refining businesses, including its renewables fuels segment and ownership stake in fast growing logistics MLP Valero Energy Partners (VLP); and its leverage to structurally cost competitive natural gas and power.

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