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The move suggestions Teck is eager to clear up some of the most pressing debts while investors are feeling more positive about miners.

Teck Resources Ltd. is hoping to tap investors' sudden surge of enthusiasm for the mining sector as it seeks to raise $1-billion (U.S.) in a debt offering.

The Vancouver-based miner lost its investment-grade credit rating last fall as it struggled with low coal prices and big requirements for capital spending, especially for the Fort Hills oil sands project in Alberta.

Amid a general funk in commodity values that drove prices for many industrial metals to their lowest levels since the financial crisis, Teck and many other base-metal miners saw their debt sink to deeply distressed levels in January.

In a remarkable turnaround, miners' bonds have surged since then as investors have grown convinced that the worst is over for commodities.

Teck will now test the market's appetite for new mining debt with a $1-billion placement of senior unsecured notes. The debt, which is likely to price on Thursday, will mature in 2021 and 2024 and will be guaranteed by some of Teck's subsidiaries.

The miner said on Monday that it will use the proceeds from the placement to buy $1-billion of its own notes that mature between 2017 and 2019. The overall effect will be to push out the company's debt maturities.

In addition, the company is amending its $1.2-billion credit facility, extending it from June, 2017, to June, 2019, but reducing it in size to $1-billion.

"We believe that these steps taken to address near-term debt maturities should be well received," Greg Barnes, head of mining research at TD Securities, wrote in a note.

Teck's flurry of action suggests it is eager to clear up some of the most pressing worries over its debt picture while investors are feeling more positive about miners than they have been in a while.

Bond yields, which move in the opposite direction to bond prices, are one way to illustrate the dramatic shift in expectations regarding base metal miners over the past few months.

In mid-January, the yield to maturity on Teck's 2022 bonds hit a high of 22 per cent, indicating widespread skepticism about the company's ability to repay its debts. Investors demanded a lush yield to compensate them for the risk of default.

However, as commodity prices have firmed and investors have grown more optimistic about Teck's prospects, the yield has shrunk to just over 10 per cent.

Similarly, HudBay Minerals Inc., another Canadian base metal miner, has seen the yield to maturity on its 2020 bonds fall from over 27 per cent in January to below 15 per cent today.

"You had a bunch of people who looked at the situation and concluded that any bounce-back in commodity prices at all would make companies like Teck or HudBay look like great value," said Jim Giles, retiring chief investment officer at Foresters Financial, a Toronto-based international financial services provider with $34-billion (Canadian) under management.

Metal prices have charted an erratic course so far this year as hopes for renewed Chinese stimulus ignited a short-lived buying frenzy that is now dying down. Still, there's a growing sense that commodities have stopped their free fall.

Credit Suisse analysts recently boosted their outlook for metal prices. Edward Morse and his team at Citigroup joined the positivity parade on Monday. They nudged up near-term forecasts and wrote that "commodities markets appear to have turned the corner and, led by the petroleum market, are accelerating their price recovery from the lows of last year."

Any sustained recovery in the prices of its major products – coal, copper and zinc – would be welcome news for Teck, which had $8.6-billion in debt at the end of March.

Also good news would be a recovery in oil prices, given the miner's heavy financial exposure to the Fort Hills project, which is not expected to begin producing bitumen until late next year. Teck owns 20 per cent of Fort Hills.

On Monday, Moody's Investors Service assigned a lacklustre B1 rating to Teck's new notes. That is below investment grade, as is the company's overall rating of B3.

Teck's credit outlook remains "negative," according to the rating agency, because its financial leverage is high and its cash flow will be heavily negative through at least 2017.

In addition, "there could be medium-term refinancing challenges," Moody's analysts Jamie Koutsoukis and Donald Carter noted. Even after the proposed debt shuffle, Teck will still have $600-million (U.S.) in unsecured debt coming due by 2019.

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