The confirmation is as a result of (1) Teck's business risk assessment remaining robust for the ratings as the Company advances its Quebrada Blanca Phase Two (QB2) expansion toward completion, notwithstanding the delay caused by the Coronavirus Disease (COVID-19) pandemic and (2) Teck's manageable funding structure for the QB2 project that includes a
The advent of the coronavirus pandemic has had a mixed impact on the mining industry as many mining operations have experienced lockdowns and other disruptions to normal business operations while the resultant reduction in supply of these metal and mineral commodities has driven the strong recovery in prices from the lows seen
That said, based on Teck's business risk profile remaining stable, DBRS Morningstar's analysis indicates that it would require an across-the-board commodity price decline below current consensus of approximately 25% for a year before Teck's credit metrics would deteriorate to a level that could trigger a negative rating action. While currently unlikely, a positive rating action could occur if there is a clear path for improved, sustained demand for Teck's principal commodities.
ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.
Notes:
All figures are in Canadian dollars unless otherwise noted.
The principal methodologies are Rating Companies in the Mining Industry (
For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com.
This rating was not initiated at the request of the rated entity.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.
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Ratings
Date Issued Debt Rated Action Rating Trend Issued
i
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EU = EU Issued, NRSRO
E = EU endorsed
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21-Sep-20 Issuer Rating Confirmed BBB Stb CA
21-Sep-20 Senior Unsecured Notes Confirmed BBB Stb CA
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