S&P lifts Alumina view to positive

S&P said it affirmed the issuer credit rating and associated issue rating on Alumina Ltd. at BB+.

The outlook is positive.

The recovery rating on Alumina's debt remains unchanged at 3.

The agency said it revised the outlook to positive to reflect the increasing earnings and cash flows of Alumina's joint-venture, Alcoa World Alumina and Chemicals (AWAC), as well as the improving credit quality of AWAC's operating company, Alcoa Corp.

S&P said it expects both Alumina and AWAC to maintain a low level of debt, which is key to their resilience amid volatile commodity prices.

In a view, AWAC's operating performance and dividend payment are key to Alumina's credit quality, the agency said.

Being a 40% stakeholder in AWAC, Alumina relies solely on the dividend distribution from AWAC to service its debt and corporate expenses, S&P said.

The agency said it expects the favorable trading conditions in the alumina industry to continue in 2018.

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