S&P puts Arconic on negative watch

S&P said it placed its ratings on Arconic Corp., including the BB+ rating on the issuer’s first-lien notes, on CreditWatch with negative implications.

The negative watch follows news Arconic agreed to be bought by Apollo Global Management Inc., the agency said.

“We assume the proposed transaction will be significantly leveraging, so we could downgrade Arconic multiple notches into the B rating category. Generally, we will assign financial sponsor-owned issuers a highly leveraged financial risk profile assessment under our criteria, based on our view of the financial sponsor's financial policy and track record,” S&P said in a press release.

S&P noted the bonds’ indentures contain change-of-control provisions.

The agency said it plans to resolve the CreditWatch in the next few months as details emerge on Arconic's capital structure.

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