Moody's confirms Harvest Operations

Moody's Investors Service said it confirmed the B2 corporate family rating and the B3 notes rating on Harvest Operations Corp. (HOC) $250 million of seven-year senior unsecured notes.

The outlook is stable.

Moody's said it confirmed the ratings, but will monitor the company's ability to avoid re-leveraging given the amount of cash flow it can generate relative to the capex and distributions expected throughout the rest of the year.

The confirmation of the existing ratings reflects the company's issuance of C$175 million of new common units along with C$75 million of subordinated convertible debentures to fund the announced C$260 million acquisition of properties in Northeast British Columbia, Moody's said.

The B2 corporate family rating reflects the increased scale of the company's reserve base with the addition of a new core area, expected improvement in price realizations with new hedges and the higher realizations of the new properties and improved cash flow cover of its reserve replacement costs under still very supportive commodity prices, the agency added.

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