Moody's: Marathon Petroleum view stable

Moody's Investors Service said it affirmed Marathon Petroleum Corp.'s (MPC) Baa2 rating and changed the outlook to stable from positive.

These actions were prompted by Marathon Petroleum's May 22 announcement that it agreed to acquire Hess Retail Holdings LLC, the retail operations of Hess Corp., for $2,874,000,000. The company expects to largely debt finance the acquisition, for which a late third quarter 2014 closing is anticipated.

"While the acquisition is a leveraging transaction, MPC has sufficient debt capacity at its Baa2 rating to absorb the increase in debt which will be employed in the financing of an acquisition that will significantly expand its retail gasoline and merchandising footprint," Moody's vice president Andrew Brooks said in a news release.

"However, on a trailing EBITDA multiple the acquisition appears expensive, with upside contingent on MPC's ability to generate improved EBITDA from the acquisition through synergies and marketing enhancements."

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