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Moody's rates Alcoa note Baa3
Moody's Investors Service said it assigned a Baa3 rating to Alcoa Inc.'s issuance of up to $575 million in convertible notes due 2014.
The agency affirmed Alcoa's Baa3 senior unsecured rating, Baa3 rating on its senior unsecured bank credit facility, the Ba2 preferred stock rating, Baa3 senior unsecured shelf rating and Prime-3 short-term rating.
The outlook is stable.
The notes are being issued under the company's well-known seasoned issuer shelf registration.
According to Moody's, the Baa3 senior unsecured rating considers the relatively weak debt protection measures, increased debt levels and leverage ratios and negative free cash flow position of Alcoa going into a major economic downturn.
The rating also reflects expectations that aluminum industry conditions, end use demand and pricing will not evidence sufficient improvement in 2009 to restore earnings levels or allow for the generation of free cash flow, the agency said.
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