Valero Energy Corp.'s plan to cleave its convenience stores and gas stations from oil refining may allow the company to bolster its balance sheet by paying off debt and abandoning a business with narrowing profit margins.

The largest U.S. refiner by processing capacity aims to leave its retail unit with a comparable debt load to peers and keep investment-grade ratings for the remaining business. A dividend to the parent from the spinoff combined with reduced capital spending would let Valero pay off about $480 million of bonds due next year and leave the retailing business with about $750 million of debt, according to Gimme Credit LLC.

While Valero will lose the 9.3 percent of sales generated by cigarettes, beer and snacks, margins are narrowing in the retail business as those in refining grow. The spinoff may also take more debt relative to its earnings than the refinery segment, according to Madison Investment Holdings Inc.