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Teck Resources loses ground after credit rating downgrade

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Teck Resources is a diversified mining group..

Canada's mining giant Teck Resources (TSE:TCK.B, NYSE:TCK) has had its credit rating downgraded to 'junk' by Moody's, it emerged.

Moody's Investors Services blamed the move on the low commodity price environment currently and heavy spending by the miner.

Credit  rating downgrades are significant as they can increase the cost of borrowing for a company, as some investors will only buy investment grade bonds.

The Moody's rating goes down one notch to  Ba1 from Baa3. 

"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.

Teck owns, or has a stake in, 12 mines in Canada, the USA, Chile and Peru and operates a large metallurgical complex and is a partner in a wind power operation.

It is also a significant producer of specialty metals such as germanium and indium and explores for copper, zinc and gold.

In Toronto on Monday, Teck shares closed down 2.99% at C$8.43.

Quick facts: Teck Resources Ltd

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TSX:TCK.B
Market: TSX
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