You are here
NEW YORK -- Sunoco Inc.'s decreased size and lack of diversification led Moody's Investors Service to lower the petroleum company's rating to so-called "junk status."
When reasoning why the company lowered its rating by one level from "Baa3" to "Ba1", the ratings firm cited that Sunoco trimmed its refining capacity by 45 percent over the last several years, which lowers costs but decreases diversification.
Sunoco's concentration on the "highly competitive" Northeast U.S. market, dependence on light crude oil products and past operational issues at its refineries could further hurt the company in the future, Moody's stated.
"Moody's believes difficult market conditions will persist over the next years, hindering Sunoco's efforts to improve returns or find other options for the refining operations," the ratings service remarked in a statement.