S&P affirms Aleris

Standard & Poor's said it affirmed Aleris International Inc.'s B+ corporate credit rating and removed its ratings from CreditWatch, where they were placed with negative implications on April 17.

The outlook is negative.

S&P said the affirmation reflects expectation that operating performance will improve in 2008 because of productivity gains and increased volume in the second half.

Ratings reflect the company's high debt leverage, thin margins, challenges in integrating recent acquisitions, acquisitive nature and exposure to highly cyclical and competitive industries, the agency said.

Ratings also reflect the company's improved product, geographic and end-user diversification resulting from recent acquisitions and limited exposure to volatile raw material costs because of contractual arrangements, S&P said.

The issuer's debt-to-EBITDA ratio of more than 6 times is somewhat weak for the rating, the agency noted.

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