Bloomberg Businessweek
Alcoa outlook revised to negative by S&P on aluminum price drop
Edited by : AL CIRCLE
1 min read
Alcoa Inc., the biggest U.S. aluminum producer, had its credit rating outlook revised by Standard & Poor’s Ratings Services to negative after a slump in the price of the metal.
At current aluminum prices, Alcoa’s cashflow and debt are “well outside our expectations” for the company’s BBB- corporate credit rating, Standard & Poor’s said in a statement today. The rating is the lowest investment-grade level.
“We expect the company to continue to post lower-than- anticipated credit measures because of continuing weak aluminum prices,” S&P said in the statement. “The company’s credit measures will remain weak at least through 2013, reflecting current weak prices, sluggish European demand, and slower-than- expected growth in China thus far this year.”
Moody’s Investors Service Inc. said in December it was putting Alcoa’s $8.6 billion of debt on review for downgrade.
Aluminum for delivery in three months on the London Metal Exchange has dropped 10 percent in the last 12 months as a global oversupply of the lightweight metal and slowing growth in China, the biggest consumer of the metal, weighs on prices.
At current aluminum prices, Alcoa’s cashflow and debt are “well outside our expectations” for the company’s BBB- corporate credit rating, Standard & Poor’s said in a statement today. The rating is the lowest investment-grade level.
“We expect the company to continue to post lower-than- anticipated credit measures because of continuing weak aluminum prices,” S&P said in the statement. “The company’s credit measures will remain weak at least through 2013, reflecting current weak prices, sluggish European demand, and slower-than- expected growth in China thus far this year.”
Moody’s Investors Service Inc. said in December it was putting Alcoa’s $8.6 billion of debt on review for downgrade.
Aluminum for delivery in three months on the London Metal Exchange has dropped 10 percent in the last 12 months as a global oversupply of the lightweight metal and slowing growth in China, the biggest consumer of the metal, weighs on prices.
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