Moody’s changes HudBay view to positive

Moody's Investors Service said it affirmed HudBay Minerals Inc.'s B3 corporate family rating, B3-PD probability of default rating and B3 senior unsecured notes ratings, raised the speculative grade liquidity rating to SGL-3 from SGL-4 and changed the outlook to positive from negative.

The actions are driven by Moody's view that HudBay now has sufficient liquidity to fund the remaining capital expenditures at its current growth projects through mid-2015 with an acceptable liquidity buffer to absorb unexpected cost overruns.

As well, with the construction of its $1.7 billion Constancia copper mine in Peru estimated to be over 80% complete (based on capital commitments), and the operation significantly de-risked, Moody's expects that cash flows from commercial production by mid-2015 will allow HudBay to rapidly de-lever to a level that could support a higher rating.

The positive outlook reflects the agency’s view that the corporate family rating could move higher in the next 12 to 18 months once Constancia commences commercial production.

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