S&P places Alumina on watch

S&P said it placed its BBB- ratings on Alumina Ltd. and its senior unsecured medium-term note program ratings on CreditWatch with negative implications.

“The CreditWatch placement follows Alumina reporting a loss and negative free operating cash flow for the half-year ending June 30, 2023. This means the company is operating outside our expectations for the current rating of BBB-, which includes achieving adjusted FOCF-to-debt of about 40% or more. Uncertainty about the ability of Alumina to restore these operating metrics in the near term, and its ability to accommodate delays in the approval of its mine plan heightens the risk of a sustained deterioration in creditworthiness,” S&P said in a press release.

The agency warned a downgrade of at least a notch could be coming considering “uncertainty about the company's ability to restore its credit metrics in a timely manner.”

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