Teck Resources lenders agree to extend $1 billion of revolver to 2019

By Angela McDaniels

Tacoma, Wash., May 23 – Teck Resources Ltd. received commitments from a majority of its lenders to extend the maturity of its $1.2 billion revolving credit facility to June 2019 from June 2017, according to a company news release.

As part of the extension, Teck has agreed to some amendments to the credit facility and to provide guarantees for the benefit of the credit facility.

Lenders holding $200 million of commitments did not extend, so the size of the facility will decrease to $1 billion in June 2017.

The amended credit facility will have covenants in addition to those contained in the original facility, including restrictions on the amount of new liens and guaranteed debt.

The amendments will limit the amount of secured debt and guaranteed debt that Teck can issue. The maximum amount of secured debt will be equal to 4% of Teck's consolidated net tangible assets or $1 billion, whichever is greater, and the maximum amount of guaranteed debt (including secured debt) will be equal to 9% of Teck's consolidated net tangible assets or $2.25 billion, whichever is greater. There are specific exemptions to each of the restrictions.

Teck will also be subject to covenants about asset sales and future subsidiary guarantors.

The debt to total capitalization covenant in Teck's current credit facility will not be amended.

Teck will also extend the guarantees to its other credit facilities.

Based in Vancouver, B.C., Teck is a resource company focused on copper, steelmaking coal, zinc and energy.

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