DBRS rates Alcoa notes BBB

DBRS said it assigned a provisional rating of BBB with a negative trend to the senior unsecured notes to be issued by Alcoa Inc. as part of the financing of the company’s $2.85 billion Firth Rixson Ltd. acquisition.

Alcoa will be required to redeem the new notes, in whole but not in part, if the Firth Rixson acquisition does not proceed prior to April 1, 2015, DBRS said.

The agency said it will finalize the rating on the notes once they are priced and if the terms are consistent with those of Alcoa’s preliminary prospectus supplement.

DBRS also said it confirmed Alcoa’s issuer rating and senior unsecured debt rating of BBB, as well as the commercial-paper rating of R-2 (middle).

The negative trend also was maintained.

Alcoa continues to be challenged to stabilize its financial metrics with what the agency said it views as a general weakness in world commodity markets, including aluminum, and heightened price volatility in the near-term.

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