S&P's Valero Energy ratings unaffected

Standard & Poor's said that Valero Energy Corp.'s (BBB-/stable) announced 33% dividend increase does not immediately affect the ratings or outlook on the company. As a result of the increase, annual dividend payments will be about $200 million, up about $50 million from the previous level.

The increased dividend comes in the midst of considerable growth-oriented spending and significant share-repurchase activity. However, these activities are largely discretionary and the agency said it views mid-cycle cash flow as being more than sufficient to cover dividends and maintenance capital spending, particularly in light of recent material debt reduction.

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