S&P puts Alumina on watch

Standard & Poor's said it placed the BBB long-term corporate credit and issue ratings on Alumina Ltd. on CreditWatch with negative implications.

The watch placement reflects concerns that current challenging trading conditions could weaken Alumina's financial metrics to levels below expectations for the BBB rating, S&P said.

If soft aluminum and alumina prices persist, as well as higher input costs, it will pressure Alumina's key cash flow metrics in 2012, the agency said.

Alumina's credit quality critically depends on a stable dividend stream paid by Alcoa World Alumina and Chemicals, S&P added.

The company relies heavily on the cash flows from Alcoa World to meet its debt obligations and dividend payments, the agency said.

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