Alcoa announces proposed public offering of mandatory convertible preferred stock

Alcoa today announced that it has commenced an underwritten public offering, subject to market and other conditions, of 25,000,000 of its depositary shares ("Depositary Shares") (or up to 28,750,000 Depositary Shares if the underwriters of the offering exercise their over-allotment option in full). Each Depositary Share represents a 1/10th interest in a share of Alcoa’s Class B Mandatory Convertible Preferred Stock, Series 1, par value $1.00 per share ("Mandatory Convertible Preferred Stock"), $500 liquidation preference per share of Mandatory Convertible Preferred Stock (equivalent to $50 per Depositary Share).

The Depositary Shares entitle the holders, through the depositary, to a proportional fractional interest in the rights and preferences of the shares of the Mandatory Convertible Preferred Stock underlying the Depositary Shares, including conversion, dividend, liquidation and any voting rights, subject to certain limited exceptions. Unless converted earlier at the option of the holders or redeemed earlier at Alcoa’s option, each share of Mandatory Convertible Preferred Stock will convert automatically into a variable number of shares of Alcoa’s common stock on October 1, 2017. The conversion rate will be determined by the price of Alcoa’s common shares on that date. The dividend rate and the conversion terms of the Mandatory Convertible Preferred Stock will be determined by negotiations between Alcoa and the underwriters.

Alcoa intends to use the net proceeds of the offering, if completed, as partial consideration to finance the previously announced proposed acquisition of the Firth Rixson business and to pay related fees and expenses. The completion of the offering is not contingent on the completion of the acquisition.

Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC are acting as joint book-running managers of the offering.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission ("SEC"). The offering may be made only by means of a prospectus supplement and the accompanying prospectus. Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained by contacting: Morgan Stanley & Co. LLC, 180 Varick Street, New York, New York 10014, Attention: Prospectus Department, telephone: (866) 718-1649; Credit Suisse Securities (USA) LLC, One Madison Avenue, New York, New York 10010, Attention: Prospectus Department, telephone: (800) 221-1037. These documents will also be filed with the SEC and will be available at the SEC's Web site.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.