Fitch downgrades Alcoa to junk

Fitch Ratings said it downgraded the long-term default ratings of Alcoa Corp. and Alcoa Nederland Holding BV to BB+ from BBB-. The agency also lowered Alcoa Nederland's senior unsecured note ratings to BB+/RR4 from BBB- and affirmed the senior secured revolver rating at BBB- and assigned an RR2 recovery rating to the facility.

“Fitch expects Alcoa's EBITDA leverage to remain above 3x through 2025, which is consistent with the BB rating category. We expect leverage to increase with near-term operating losses until planned cost reduction actions take effect and profitability recovers. Fitch expects that the company will need external funding to support its operations and restructuring activities during this period,” the agency said in a press release.

The outlook is stable.

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