Moody’s changes Aleris view to developing

Moody's Investors Service said it changed Aleris International Inc.'s outlook to developing from stable and affirmed its B3 corporate family rating, B3-PD probability of default rating, B2 secured notes rating and Caa2 senior unsecured notes rating.

The speculative grade liquidity rating of SGL-3 is unchanged.

Moody’s said the outlook change results from Aleris' announcement that it entered into a definitive agreement to be acquired by Zhongwang USA LLC. Liu Zhongtian is the majority owner and heads Zhongwang. The transaction is valued at $2.33 billion, which is comprised of $1.11 billion in cash for equity plus $1.22 billion in net debt.

At June 30, Aleris reported $1.32 billion in debt (prior to Moody's standard adjustments) and $75 million in cash.

The developing outlook reflects the lack of clarity surrounding the acquisition in terms of how it will be financed, whether any change in control is triggered, and what the impact on Aleris' capital structure might be, the agency said. Also captured in the outlook is the uncertainty surrounding the strategic objectives of Zhongwang and execution on Aleris' growth strategy and investment requirements.

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