TSX:TECK.A - Post by User
Post by
HighTeston Mar 23, 2009 9:38am
570 Views
Post# 15862587
BBB-
BBB-Post says Teck credit rating cut to junk
2009-03-23 08:45 ET - In the News
The Financial Post reports in a Bloomberg dispatch Saturday that Teck Comincowas cut to junk Friday by Standard & Poor's because of concerns low demandwill make it harder to refinance its debt. The unbylined item says Teck'slong-term credit ratings were reduced to BB+ from BBB-, the lowest investmentgrade, and put on review for possible further downgrades. The move followsS&P's one-level downgrade of Teck on Jan. 13 from BBB. "The current poorconditions in Teck's core markets will persist through 2009, likely resulting inweaker-than-expected profitability and cash flow," S&P said. "The companywill carry more debt for a longer period than we expected at the time of itsdebt-financed acquisition" of Fording Canadian Coal Trust's Elk Valley CoalPartnership assets. Chief executive officer Donald Lindsay has halted dividends,cut jobs and suspended high-cost production to conserve cash amid the globaleconomic slowdown. Vancouver-based Teck, the world's second-largest zincproducer, said last month it is working to renegotiate the remainder of thebridge loan used to help pay for Fording Canadian Coal Trust. Teck's shares havedeclined 85 per cent in the past year.