Moody’s rates Mountain Province, notes B3

Moody's Investors Service said it assigned first-time ratings to Mountain Province Diamonds Inc., consisting of a B3 corporate family rating, a B3-PD probability of default rating, a B3 second-lien secured rating and an SGL-2 liquidity rating.

The outlook is stable.

Mountain Province's proposed financing is comprised of a $50 million first-lien secured revolving facility and $325 million of second-lien notes due 2022.

The agency said the corporate family rating is driven by concentration risk, very small relative production, a limited operating track record, its position as a new global marketer of rough diamonds, the expected variability of mined grades, reduced diamond pricing in recent years, the opaqueness of diamond pricing, including the managed supply-demand characteristics of this luxury good, and De Beers Canada's mixed operating track record in Canada.

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