Moody’s upgrades Alcoa

Moody's Investors Service said it upgraded Alcoa Nederland Holding BV's corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD.

The senior unsecured notes, guaranteed by Alcoa Corp. and restricted subsidiaries, were upgraded to Ba2 from Ba3 and the speculative grade liquidity rating was upgraded to SGL-1 from SGL-2.

The outlook is stable.

Moody’s said the upgrade acknowledges the strengthened operating profile of Alcoa, improvement in debt protection metrics, moderate leverage (roughly 1.8 times), and excellent liquidity position.

“Alcoa's improved earnings and cash flow profile is driven by the strengthened fundamentals in the aluminum markets and consequent pricing improvement for both alumina (+ roughly 34% in the first half of 2017 versus the comparable 2016 period) and aluminum (+ roughly 15% in the first half of 2017 versus the comparable 2016 period), as well as continued focus on costs although cost creep is evidenced and the company anticipates a net impact of negative $50 million in 2017,” the agency said in a news release.

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