DBRS Releases Report on Alcoa Inc.

DBRS has today released a report on Alcoa Inc. (Alcoa or the Company) that supports the July 18, 2013, change in the trends of the Company’s Issuer and Senior Unsecured Debt ratings of BBB and its Commercial Paper rating of R-2 (middle) from Stable to Negative.

Although Alcoa is a leading aluminum producer, the industry has suffered from an oversupply of alumina and aluminum production, driving prices to such low levels as to significantly reduce the profitability of even cost-competitive upstream producers. The trend changes reflected the weakening of alumina and aluminum prices, which have rendered Alcoa’s financial metrics poor for its current rating levels.

Alcoa’s earnings in 2013 are expected to improve over very weak 2012 levels, yet still falling short of 2011 levels, and its credit metrics are expected to remain cyclically weak for its ratings. Accordingly, Alcoa’s ratings remain vulnerable to a further deterioration of its operating cash flow or the unexpected need for funds from its legacy environmental issues, litigation or for other reasons.

A further deterioration in the outlook for the Company, or for Alcoa to fail to stabilize or improve its financial metrics during the course of the next year, can be expected to lead to a ratings downgrade.

Today’s report and the July 18, 2013, press release are available at www.dbrs.com or by contacting us at info@dbrs.com.