S&P lifts Teck Resources

S&P said it raised the long-term corporate rating on Teck Resources Ltd. to BB from B+.

The agency also said it raised the ratings on the company's guaranteed senior unsecured notes to BB from BB- and on its non-guaranteed senior unsecured notes to BB from B+.

S&P also said it revised the recovery rating on the guaranteed notes to 3 from 2 with no notching from the corporate credit rating.

A 3 recovery rating indicates 50% to 70% expected default recovery. The recovery rating on the non-guaranteed notes is unchanged at 4, indicating 30% to 50% expected default recovery.

The outlook is stable.

The upgrades reflect the significant improvement in the estimates for Teck's prospective cash flow and credit measures, which primarily reflect the sharp recent increase in metallurgical coal prices, S&P said.

The agency also said it now expects Teck to generate an adjusted debt-to-EBITDA ratio well below the previous upgrade trigger of 4x over the next two years.

The company's stronger estimated liquidity position materially reduces the funding risk associated with Teck's Fort Hills oil sands project, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.