Moody’s: Teck view to negative

Moody’s Investors Service said it affirmed Teck Resources Ltd.’s Baa3 senior unsecured ratings and changed its outlook to negative from stable.

The negative outlook reflects a view that metallurgical-coal prices are likely to remain weak for some time, Moody’s said.

Teck’s financial leverage, therefore, is expected to remain elevated for longer than previously expected, the agency said.

The ratings are driven by the diversity and scale of the company’s business, low geopolitical risks and good cost position, Moody’s said.

The ratings are offset by Teck’s high leverage and material free cash flow consumption, the agency said.

Exposure to commodity-price volatility, production and development risks and meaningful capital expenditure requirements also constrain the rating, Moody’s added.

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