Sept 14 (Reuters) - Moody's Investors Service downgraded the
rating of Teck Resources Ltd TCKb.TO to junk on Monday,
blaming weak commodity prices and heavy capital spending by the
Canadian miner.
Moody's said it was cutting Teck's senior unsecured rating
by one notch to Ba1 from Baa3. Teck's ratings outlook remains
negative, it added.
Credit downgrades typically drive up the cost of borrowing
for companies, as some big investors will only buy investment
grade bonds.
"We expect prolonged commodity price weakness and sizable
investment spending will cause Teck's financial leverage to
remain well in excess of typical investment grade thresholds
through at least 2017," Moody's said in a statement.
Prices for Teck's main commodities, coal and copper, have
fallen sharply in recent years and show few signs of a quick
turnaround.
The agency said it expects Vancouver-based Teck will burn
through C$1.5 billion ($1.13 billion) in cash in 2016 and C$1
billion in 2017 as it presses ahead with the Fort Hills oil
sands project, where it holds a minority stake.
Teck's shares were down 2 percent on the Toronto Stock
Exchange at C$8.50 after the rating cut.
($1 = 1.3263 Canadian dollars)