VALERO <VLO> PREFERRED STOCK UPGRADED BY S/P
Standard and Poor's Corp said it
raised to B from B-minus Valero Energy Corp's preferred stock.
    Also, the rating agency affirmed Valero's BB-minus
industrial revenue bonds and B-rated debentures. About 950 mln
dlrs of long-term debt is outstanding.
    S and P said Valero's financial flexibility would improve
as the company plans to use proceeds of roughly 760 mln dlrs
from a proposed sale of natural gas operations to reduce debt.
Pro forma debt leverage drops to about 30 pct from 67 pct at
September 30, 1986. But S and P said Valero's refining segment
has been unable to consistently generate operating profits.
 Reuter
