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    S&P Rates MAPCO a B+

    Rating affirmed after Delek's announcement to acquire 107 Favorite Markets stores from Calfee, which will look elsewhere for growth.

    NEW YORK -- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Franklin, Tenn.-based Mapco Express Inc. (MAPCO), the company reported.

    The affirmation follows MAPCO's announcement regarding the signed, definitive agreement for the purchase of 107 retail fuel and convenience stores from Calfee Company of Dalton Inc. for about $65 million plus the cost of inventory, reported by CSNews Online earlier this week.

    "The ratings reflect MAPCO's participation as a relatively small regional player in the competitive and highly fragmented convenience store industry and significant exposure to the volatility of gasoline prices," said Standard & Poor's credit analyst Jackie E. Oberoi.

    The sale of Calfee Company’s stores was also beneficial to the seller, as it opened up space to grow in other markets.

    "I am continuing in the business with the Com-Pac stores in Alabama. This is a good opportunity to grow in a different area," head of Calfee Company of Dalton, Sam Turner, told CSNews Online. "There are other plans in the works but I cannot talk about them until after MAPCO writes a big check."

    Standard & Poor's believes that credit metrics for MAPCO, a wholly owned subsidiary of Delek U.S. Holdings Inc. (Delek), will remain appropriate for the 'B+' rating given the company's plan to finance the acquisition with a combination of additional borrowings and cash from Delek's May 2006 IPO.

    An additional factor, according to the report, is the company's concentration in a few key markets in the Southeastern U.S. where economic slowdowns can affect operations. The company also is highly leveraged and has a relatively small EBITDA base, the report stated.

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