Fitch places Arconic on watch

Fitch Ratings said it placed its ratings on Arconic Corp., including its BB+ rating on the company’s $900 million of 6 1/8% notes due 2028, on rating watch negative.

The RWN follows the announcement on Thursday that Apollo Global Management, Inc. plans to buy Arconic for about $5.2 billion, the agency said.

“The RWN reflects the uncertainty regarding Arconic's long-term financial and capital allocation policies, particularly regarding the post-transaction capital structure and the potential need for external funding for planned strategic investments identified in the company's acquisition announcement. An incremental debt burden could weigh on the company's future FCF, relative to current levels,” Fitch said in a press release.

The deal is expected to close in the second half of 2023and is subject to regulatory and Arconic shareholder approvals at which point Fitch said it aims to resolve the RWN.

The agency said it plans to evaluate the post-acquisition strategy and the financial policies to be pursued by the new owners, and Fitch said it could result in a downgrade of Arconic's ratings.

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