S&P puts Harvest on positive watch

Standard & Poor's said it placed its B+ long-term corporate credit rating on Harvest Energy Trust and B- senior unsecured debt rating on subsidiary Harvest Operations Corp. on CreditWatch with positive implications following the announcement that Viking Energy Royalty Trust and Harvest Energy have agreed to merge.

The rating on Harvest Energy reflects the trust's regional focus in western Canada, its below-average reserve life and its reliance on acquisition-related growth to replace reserves. With the closing of its announced merger with Viking Energy, these factors are expected to improve, the agency said.

These weaknesses, which hamper Harvest Energy's current credit profile, are to some extent offset by its favorable production mix post merger and a comparatively low distribution rate, S&P added.

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