Moody’s might lift Andeavor

Moody’s Investors Service said it affirmed Marathon Petroleum Corp.'s Baa2 senior unsecured debt rating and stable outlook, and placed Andeavor's Baa3 senior unsecured debt rating under review for upgrade.

The agency also placed Andeavor Logistics LP's Ba1 corporate family rating and Ba1 senior unsecured notes rating under review for upgrade.

MPLX LP's Baa3 unsecured debt rating and stable outlook are not affected.

The agency said the actions follow Marathon Petroleum's announcement that it will acquire Andeavor in an 85% equity-financed transaction for about $23 billion, plus the assumption of $3.5 billion of Andeavor debt.

"Reflecting the largely equity financed nature of MPC's acquisition of ANDV, Moody's sees little change in the key pro forma debt/EBITDA and retained cash flow (RCF) to debt financial metrics adjusted for the acquisition than what it had been projecting for MPC on a stand-alone basis," Andrew Brooks, Moody's vice president, said in a news release.

"However, the acquisition adds considerably to the scale of MPC's refining, marketing and logistics operations, while also enhancing the company's geographic reach and operating diversification."

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