Moody's rates Citic Resources bonds Ba2

Moody's Investors Service said it assigned a provisional Ba2 corporate family rating to Citic Resources Holdings Ltd., along with a provisional Ba2 rating to the proposed intermediate term benchmark senior unsecured bonds to be issued by Citic Resources Finance (2007) Ltd. and guaranteed by Citic Resources.

The outlook is stable.

This is the first time that Moody's has assigned ratings to Citic Resources. Proceeds from the bonds will be used primarily to finance Citic Resource's acquisition of 50% interests of Nations Energy Company Ltd. from its parent Citic Group.

The ratings reflect Citic Resources' underlying credit strength, based in turn on the established production record of the Karazhanbas oil field, Moody's said. The ratings also reflect the fair likelihood that the company would receive support from its 55% owner, Citic Group (Baa2 with negative outlook), in a distress situation, the agency said.

These strengths are tempered by the company's high financial leverage, its relatively small operating-scale and its lack of a track record for achieving reserve-replacement and oil-recovery enhancement targets, Moody's said.

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