Moody's might upgrade Harvest

Moody's Investors Service said it placed Harvest Operations Corp.'s ratings under review for possible upgrade, including its B3 corporate family and probability-of-default ratings and Caa1 (LGD4, 65%) senior unsecured bonds.

The review follows an announcement that the company has agreed to be acquired by Korea National Oil Co. As part of the transaction, Korea National Oil will offer to purchase Harvest's outstanding 7 7/8% U.S. notes and convertible debentures for 101% of par.

Moody's believes there is a high likelihood that this transaction will close, in which case Harvest's ratings will be upgraded.

If the transaction does not materialize, the agency said it will likely put Harvest's ratings back on review for possible downgrade, which was initiated following poor operating performance and deterioration in liquidity.

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