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A refinery in Newfoundland and Labrador.
A refinery in Newfoundland and Labrador.
(FRED LUM/THE GLOBE AND MAIL)

Streetwise

Energy giant KNOC dogged by Harvest acquisition

When state-owned Korea National Oil Corp. bought Harvest Energy Trust for $1.8-billion in 2009, the Canadian company was reeling from a heavy debt burden that sent its shares tumbling. More than three years later, very little has changed.

Last week rating agency Moody’s Investor Service downgraded the portion of Harvest’s debt that isn’t backstopped by the energy giant, largely because of the company’s total borrowing. $500-million (U.S.) worth of senior unsecured notes that come due in 2017 were downgraded to B1 from Ba3.