Fitch rates Teck notes BB-

Fitch Ratings said it assigned a BB- with recovery rating of RR3 to Teck Resources Ltd.'s issue of senior unsecured notes guaranteed by certain Teck subsidiaries.

The new notes will rank pari passu with the company's revolving credit and bilateral facilities and ahead of the senior unsecured notes that are not guaranteed, Fitch said.

The proceeds will be used to fund the cash tender offers to purchase up to $1 billion aggregate principal amount of the 3.15% notes due 2017, 3.85% notes due 2017, 2½% notes due 2018 and 3% notes due 2019, the agency said.

Fitch also said it upgraded the $3 billion revolving credit facility due 2020 and the $1.2 billion revolver due 2017 to BB- with recovery rating of RR3 and downgraded Teck's unsecured non-guaranteed notes to B- with recovery rating of RR6.

The agency also said it has affirmed Teck's issuer default rating at B+.

The outlook remains negative.

The ratings reflect expectations for sizable cash burn at the company, elevated financial leverage, weak demand growth and excess supply in metallurgical coal, copper and zinc, Fitch said.

The company has also focused on decreased spending and monetizing precious metals streams, along with cutting its dividends, the agency said.

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