(Adds company statement)
By Natalie Harrison
NEW YORK, April 11 (IFR) - Fitch Ratings cut aluminum maker
Alcoa to "junk" status on Friday, citing expectations that the
company's leverage will remain above that required for an
The ratings agency cut the issuer to BB+ from BBB- with a
Fitch said the company's profitability has been hampered by
global oversupply in aluminum.
"The downgrade reflects Fitch's view that financial leverage
will remain above 2.5x on a total debt/EBITDA level and above
3.5x on an FFO adjusted level through 2014," Fitch said.
"Significant pension contributions will keep FFO adjusted
leverage above 3.5 through 2015. The company has generated free
cash flow after capital expenditures and dividends to
shareholders since 2010 despite weak aluminum prices."
Alcoa is rated BBB- by S&P, the lowest investment-grade
rating, and Ba1 by Moody's.
"Alcoa is aggressively transforming the company - building
out our value-add businesses and improving our competitive
position by lowering the cost base of our commodity business,"
Monica Orbe, director of corporate affairs at Alcoa said in an
emailed statement after the downgrade.
"Our debt is at the lowest level it's been since 2007, and
we have no significant maturities due before 2017. Our strong
first quarter operating performance and positive long-term
outlook are evidence that our strategy is working and that our
future is bright."
(Reporting by Natalie Harrison; Editing by Mariana Santibanez)