Fitch: Alcoa's Acquisition of RTI International Metals Credit Neutral

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings expects the acquisition of RTI International Metals, Inc. (RTI) by Alcoa Inc. (IDR 'BB+'/Outlook Stable), announced today, to be credit neutral. The stock-for-stock transaction, valued at $1.5 billion including the assumption of roughly $517 million in convertible notes, builds on Alcoa's aerospace business and expands the company further into high performance metals. The two companies' businesses are complementary with little product overlap.

RTI is a leading producer and global supplier of titanium mill products, and a manufacturer of fabricated titanium and specialty metal components. Principal end-markets are commercial aerospace (63% of 2014 sales), defense (17% of 2014 sales), and energy, medical devices and other (20% of 2014 sales). The company had 2014 revenues of $793.6 million and operating EBITDA of $115.2 million.

The acquisition is subject to regulatory approvals and conditions and is expected to close in the second half of 2015. Leverage post-transaction is not expected to be materially different from Alcoa pre-transaction. Alcoa's total debt to operating EBITDA was 2.5 times at Dec. 31, 2014.

Fitch currently rates Alcoa as follows:

--Issuer Default Rating (IDR) at 'BB+';

--Senior unsecured debt at 'BB+';

--$3.75 billion revolving credit facility at 'BB+';

--Preferred stock at 'BB-'.

--Short-term IDR at 'B';

--Commercial paper at 'B'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'.

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Fitch Ratings
Monica M. Bonar
Senior Director
+1 212-908-0579
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Gregory Fodell
Director
+1 312-368-3117
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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