Moody's rates Teck notes Baa3

Moody's Investors Service said it assigned a Baa3 senior unsecured rating to Teck Resources Ltd.'s proposed $700 million senior unsecured notes issuance due 2021 and 2040.

Moody's also affirmed Teck's Baa3 rating on its existing senior unsecured notes.

The outlook remains positive.

Proceeds will be used to help fund the offer to purchase for cash up to $1 billion principal amount of its outstanding 10.75% senior secured notes due 2019.

Teck's Baa3 rating reflects the company's significant business diversity and size, meaningful presence in a variety of metals and ore markets, high-quality/low-cost assets primarily in politically stable regions and excellent liquidity profile, Moody's said.

Ratings also consider Teck's ability to withstand a sharp downturn in commodity prices and management's focus on prudent balance sheet management, the agency noted.

Ratings are challenged by the volatile demand and pricing for Teck's commodity products and fairly high levels of operating and reinvestment risk inherent to the mining industry, the agency said.

Moody's said it expects Teck to sustain a debt-to-EBITDA ratio between 2x to 2.5x on an adjusted basis throughout pricing cycles.

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