Fitch rates Alcoa Nederland BB+

Fitch Ratings said it assigned Alcoa Nederland Holding BV an issuer default rating of BB+ with a stable outlook.

The ratings benefit from an Alcoa Corp. guarantee and reflect Alcoa's modest leverage, leading positions in bauxite, alumina, and aluminum; strong control over costs and spending; and flexibility afforded by the scope of its operations.

Alcoa was spun-off from Alcoa Inc. (subsequently renamed Arconic Inc.) on Nov. 1, 2016.

As of Dec. 31, Alcoa's total debt of $1.5 billion was 1.6 times operating EBITDA after dividends from associates and net distributions to minority interests.

Fitch said it expects improved earnings in the company's first full year of stand-alone operations on improved aluminum industry fundamentals as well as cost reductions. Management estimates 2017 adjusted EBITDA, excluding special items, to be $2.1 billion to $2.3 billion compared to about $1 billion in 2016.

The agency’s rating case projects annual operating EBITDA in the range of $1.6 billion and $1.9 billion and FFO adjusted leverage ranging between 1.5 times and 2 times over the rating horizon.

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