Fitch rates Arconic loans BBB-

Fitch Ratings said it assigned an expected BBB-/RR1 rating to Arconic Rolled Products Corp.’s proposed $800 million senior first-lien secured term loan and $1 billion senior first-lien secured revolver. Fitch assigned the company an expected BB+ rating. The outlook is stable.

Arconic’s proposed leverage is low and financial structure is strong for the proposed ratings. “Fitch forecasts 2020 gross debt/EBITDA to remain below 1.5x and FFO adjusted leverage at or below 3.5x, which are more commensurate with BBB or A category issuers. Fitch believes the company must maintain lower leverage than similarly rated peers due to the high degree of cyclicality, profitability consistent with mid-BB category rated issuers and substantial required pension contributions,” the agency said in a press release.

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