Moody’s ups Harbinger notes to Ba3, Caa1

Moody's Investors Service said it changed Harbinger Group Inc.'s outlook to stable from negative.

At the same time, the agency upgraded the company's senior secured notes to Ba3 from B2 and its senior unsecured notes (recently upsized to $750 million) to Caa1 from Caa2.

The B2 corporate family rating and the B2-PD probability of default rating were affirmed. The speculative grade liquidity rating was upgraded SGL 2 from SGL 3.

"The revision in the outlook to stable from negative reflects our expectation of increased dividend capacity and our belief that the company will start increasing dividends in the mid-term to cover its total charges (interest expense plus cash operating expenses)," Moody's senior credit officer Kevin Cassidy said in a news release.

The notes upgrade was a function of changes in the company's liability mix between secured and unsecured debt as opposed to a fundamental improvement in the company's underlying credit.

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