Fitch affirms Alcoa Aluminio

Fitch Ratings said it affirmed Alcoa Aluminio SA's local-currency issuer default rating, foreign-currency issuer default rating and series 1996-1 secured export notes (SENs) due December 2008 at BBB and its national scale rating at AAA(bra).

The outlook is stable.

The agency said Alcoa Aluminio's ratings reflect the company's position as a leading integrated aluminum producer in Latin America and the support of its parent, Alcoa Inc.

In 2007, the company's total adjusted debt increased 30% to $729 million, increasing its total adjusted debt-to-operating EBITDA to 1.6 times from 1.4 times in 2006. The agency expects Alcoa Aluminio's leverage ratio to increase considerably to nearly 3.5 times as the company plans to take on about $1 billion of additional debt to fund its share of the Juruti bauxite and the Alumar alumina refinery expansion projects.

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