Moody's rates Alcoa Nederland notes Ba1

Moody's Investors Service said it assigned a Ba1 rating to Alcoa Nederland Holding BV's new senior unsecured notes, guaranteed by Alcoa Corp. and subsidiaries. All other ratings, including the speculative grade liquidity rating and stable outlook remain unchanged.

The rating is in line with that of Alcoa Nederlands’ notes sold in July.

The proceeds along with balance sheet cash will be used to repay the outstanding 6¾% senior unsecured notes due 2024, contribute about $500 million to U.S. defined benefit pension plans and pay the associated fees and expenses.

“Moody's views the repayment of $750 million notes due 2024 and the $500 million prefunding of the U.S. pension plan as credit positive. The transaction will effectively lead to lower Moody's-adjusted leverage, extend the debt maturity profile and reduce exposure to the volatility risk associated with pension obligations while allowing the company to maintain its excellent liquidity position. Additionally, the pension contribution is expected to eliminate the U.S. pension funding requirement for about three years, enhancing the company's financial flexibility,” the agency said in a press release.

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