S&P: Aleris view to negative

S&P said it affirmed the B corporate credit rating on Aleris International Inc. and revised its outlook to negative from stable.

The agency also said it affirmed the B rating on the company's $800 million 9½% senior secured notes and B- rating on its $500 million 7 7/8% senior unsecured notes.

The 3 recovery rating on the senior secured notes indicates 50% to 70% expected default recovery. The 5 recovery rating on the senior unsecured notes indicates 10% to 30% expected default recovery.

The negative outlook considers an expectation that credit metrics will remain stretched over the next 12 months due to continued debt-financed capital spending, S&P said.

Aleris has been investing heavily in its auto body sheet (ABS) capabilities in its Kentucky, which caused adjusted debt-to-EBITDA to rise higher than anticipated, the agency explained.

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