S&P lifts HudBay notes, view to positive

Standard & Poor’s said it revised the outlook on HudBay Minerals Inc. to positive from stable and affirmed its B- long-term corporate credit rating.

The agency also said it raised the rating on the company’s senior unsecured notes to B from B- and revised its recovery rating on the debt to 2 from 3.

The 2 recovery rating reflects 70% to 90% expected default recovery.

The outlook revision primarily reflects an expectation that HudBay’s credit ratios will materially improve over the next 12 months, notably from a significant increase in output from the company’s Constancia project in Peru, S&P said.

The ratings also consider HudBay’s weak business risk assessment due to the company’s limited operating diversity, exposure to volatile base metals prices and relatively low reserve life of its current operating mines, the agency said.

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