VANCOUVER, BRITISH COLUMBIA, Aug. 3, 2010 (Marketwire) -- Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) ("Teck") announced today that it has commenced an offer to purchase for cash (the "Tender Offer") up to an aggregate of US$600 million principal amount of its outstanding 9.75% senior secured notes due 2014 (the "2014 Notes") and 10.25% senior secured notes due 2016 (the "2016 Notes" and, together with the 2014 Notes, the "Notes"). Teck also announced it has commenced an offering of up to an aggregate of US$750 million of senior unsecured notes due 2017 and 2040.
The new senior unsecured notes are being offered via an underwritten public offering in the United States pursuant to an effective shelf registration statement on Form F-9 filed with the United States Securities and Exchange Commission and in Canada on a private placement basis. The senior unsecured notes will be guaranteed by Teck Metals Ltd. and will rank pari passu with Teck's other senior debt. Teck expects to fund the repurchase of Notes in the Tender Offer from the proceeds of the offering of the new senior unsecured notes.
The terms and conditions of the Tender Offer are described in the Offer to Purchase, dated August 3, 2010 (the "Offer to Purchase"), and the related Letter of Transmittal (the "Letter of Transmittal") to be distributed to holders of the Notes. The following table sets forth the Notes that are subject to the Tender Offer and certain other terms of the Tender Offer:
Title Amount Acceptance Tender
of CUSIP Outstanding Priority Amount
Securities Numbers (US$) Level (US$)
9.75% Senior 878742AJ4 $1,315,000,000 1 $600,000,000
Secured Notes 878742AG0
due 2014 C87392AA1
10.25% Senior 878742AM7 $1,060,000,000 2 $300,000,000
Secured Notes 878742AK1
due 2016 C87392AB9
Title Offer Tender Total
of Consideration Payment Consideration
Securities (1) (1) (1)(2)
9.75% Senior $1,212.50 $30.00 $1,242.50
10.25% Senior $1,197.50 $30.00 $1,227.50
1. Per US$1,000 principal amount of Notes tendered and accepted for
2. Inclusive of the Early Tender Payment.
The Notes will be purchased in accordance with, and in the order of, the Acceptance Priority Levels set forth in the table above. 2014 Notes, which are within the first Acceptance Priority Level, will be accepted before 2016 Notes, which are within the second Acceptance Priority Level. As a result, all tendered 2014 Notes will be accepted for purchase before tendered 2016 Notes may be accepted for purchase, subject to the limitation that no more than US$600 million aggregate principal amount of Notes will be purchased. In addition, in no event will more than US$300 million aggregate principal amount of 2016 Notes be purchased.
If there are sufficient remaining funds to purchase some, but not all, of the Notes of series of an applicable Acceptance Priority Level, the amount of Notes purchased in that series will be prorated based on the aggregate principal amount of Notes of such series validly tendered and not withdrawn in the Tender Offer.
We expect to accept for payment a portion (as further described in the Offer to Purchase) of all 2014 Notes that are tendered and not validly withdrawn on or prior to 5:00 p.m., New York City time, on August 16, 2010 (the "Early Tender Date") on a date (the "Early Acceptance Date") promptly following the later of the Early Tender Date and the fulfillment or waiver of the Financing Condition (as defined below).
The Tender Offer will expire at 12:00 midnight, New York City time, on Monday, August 30, 2010 unless extended or earlier terminated (such time and date, as may be extended or earlier terminated, the "Expiration Time"). Under certain circumstances, and as more fully described in the Offer to Purchase, Teck may terminate the Tender Offer before the Expiration Time. The obligation of Teck to accept for purchase and pay for Notes validly tendered pursuant to the Tender Offer is conditioned on satisfaction or waiver of a number of conditions set forth in the Offer to Purchase, including consummation of an offering of senior unsecured notes on terms reasonably satisfactory to Teck (the "Financing Condition"). If the Early Settlement Date occurs, then we will be deemed to have waived substantially all of the conditions to the Offer. The Tender Offer is not subject to the receipt of any minimum amount of tenders.
Holders of Notes that validly tender and do not withdraw their Notes in the Offer on or prior to the Early Tender Date and whose Notes are accepted for purchase by Teck will receive the Total Consideration set forth in the table above for each US$1,000 principal amount of 2014 Notes and 2016 Notes accepted for purchase, respectively, which includes the Early Tender Payment. Holders of Notes that are validly tendered in the Offer after the Early Tender Date but at or prior to the Expiration Time and are accepted for purchase by Teck will receive the Tender Offer Consideration set forth in the table above for each US$1,000 principal amount of 2014 Notes and 2016 Notes accepted for purchase, respectively, but not the Early Tender Payment thereon. In addition, holders of Notes accepted for purchase will receive an amount equal to accrued and unpaid interest on their purchased securities from the applicable last interest payment date to, but not including, the date of payment for purchased Notes.
Holders may withdraw Notes validly tendered and not previously withdrawn, on or prior to 5:00 p.m., New York City time on August 16, 2010. Otherwise holders will be extended withdrawal rights as required by law.
If the Tender Offer is consummated, a portion of the future interest expense related to the repurchased Notes, and related original issue discount and fees currently being amortized, will be charged to earnings in the quarter the Tender Offer is concluded. Assuming that Teck purchases US$600 million of 2014 Notes in the Tender Offer using the Total Consideration, it will record an accounting charge of approximately US$185 million, before tax, in the third quarter of 2010.
The complete terms and conditions of the Tender Offer are set forth in the Offer to Purchase and Letter of Transmittal that will be sent to holders of the Notes. Holders are encouraged to read these documents carefully when they become available.
Banc of America Securities LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are the Dealer Managers for the Tender Offer. Questions regarding the Tender Offer may be directed to Banc of America Securities LLC Debt Advisory Services at (888) 292-0070 (toll-free), Citigroup Global Markets Inc. Liability Management Group at (800) 558-3745 (toll free) and J.P. Morgan Securities Inc. Liability Management Group at (866) 834-4666 (toll-free). Global Bondholder Services Corporation has been retained as depositary and information agent for the tender offer. Requests for documents may be directed to Global Bondholder Services Corporation by telephone at (866) 389-1500 (toll-free) or in writing at 65 Broadway - Suite 404, New York, NY 10006, Attention: Corporate Actions. Teck is making the Tender Offer only by, and pursuant to the terms of, the Offer to Purchase and the related Letter of Transmittal.
This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The new notes offering is being made pursuant to an effective shelf registration statement in the United States and a private placement in Canada. A copy of the prospectus and related prospectus supplement may be obtained by visiting the SEC's website at www.sec.gov or by calling Banc of America Securities LLC at (800) 294-1322 (toll-free), Citigroup Global Markets Inc. at (877) 858-5407 (toll-free) and J.P. Morgan Securities Inc. at (212) 834-4533 (collect).
About Teck Resources Limited
Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. Headquartered in Vancouver, Canada, its shares are listed on the Toronto Stock Exchange under the symbols TCK.A and TCK.B and the New York Stock Exchange under the symbol TCK.