Moody’s revises Phillips 66 to negative

Moody's Investors Service said it changed Phillips 66 Co.'s outlook to negative from stable and affirmed its A3 senior unsecured rating.

The agency also affirmed the Prime-2 rating assigned to Phillips 66 commercial paper program and took other rating actions.

"The change in Phillips 66's outlook to negative reflects our expectation of elevated consolidated leverage as the company continues to debt fund share buybacks in a refining down cycle," Moody's senior vice president Terry Marshall said in a news release.

"The announced $1.1 billion debt issuance at Phillips 66 Partners (PSXP, Baa3 stable) to fund a drop down from Phillips 66 coupled with reduced cash flow in the currently weak refining environment will result in higher consolidated leverage than we associate with the Phillips 66's A3 rating through 2017".

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