Moody's rates HudBay notes B3

Moody's Investors Service said it assigned a B3 rating to HudBay Mining and Smelting Inc.'s proposed $200 million secured notes due 2012.

The outlook is stable.

Moody's said the B3 rating considers HudBay's exposure to zinc and copper prices, its significant reliance on one mine, its requirement to purchase significant volumes of copper, and to a lesser extent, zinc, concentrates, its financial leverage, its recent establishment as a stand-alone corporate entity, and its small size.

The rating also reflects the reasonable cost position of the company's mining and smelting operations, the company's long history of mining in the Flin Flon, Manitoba area, and its experienced management team.

Moody's also rates HudBay's senior implied rating B3 and senior unsecured issuer rating Caa2. The speculative grade liquidity rating is SGL-3.

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