Moody's gives Arconic loan Ba1

Moody's Investors Service said it assigned Arconic Rolled Products Corp. a Ba2 corporate family rating, a Ba2-PD probability of default rating and a Ba1 rating to the company's $1 billion senior secured first-lien revolving credit facility and $800 million senior secured first-lien term loan B. The outlook is negative. This is the first time Moody's has rated Arconic.

“The Ba2 CFR reflects Arconic's end-market diversity and global footprint but incorporates softer market conditions in several of its end markets as well as the expected impact of Boeing's production suspension of its 737 Max, which will affect all suppliers to this Boeing platform. ARP's environmental and other unknown magnitude of liabilities from the Grenfell fire are also considerations in the CFR rating” said Carol Cowan, a Moody’s senior vice president and lead analyst for Arconic, in a press release.

The negative outlook reflects the uncertainty surrounding the duration of the Boeing production suspension and the ultimate impact on performance of Arconic. The outlook also captures the slowing economic environment and softening in a number of markets served by the company, including the transportation markets including automotive, although contraction here is expected to be relatively modest, the agency said.

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