Fitch rates Harmony Gold BB+, B

Fitch Ratings said it assigned Harmony Gold Mining Co. Ltd. an issuer default rating of BB+ and a short-term issuer default rating of B. The agency affirmed Harmony's national ratings at long-term BBB(zaf) and short-term F3(zaf).

The outlook is stable.

Fitch assigned an international rating because the company plans to launch a $350 million seven-year international bond in July. Proceeds will be used to fund ongoing mine development and expansion.

The ratings reflect the company's financial performance and the prospect that it will benefit over the next two to three years from higher production levels and stabilizing operating costs.

Fitch said it also recognizes that Harmony's recent trading improvement can be attributed to stronger rand-denominated gold prices over the past 12 months. The company's cash flows are tied to future gold price and exchange rate movements.

The stable outlook represents the agency's view that Harmony's future capital expenses and the resulting diversification away from South Africa should improve its operational and financial profile.

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