Arconic swaps out Alcoa stock, buys debt held by Citi, Credit Suisse

By Susanna Moon

Chicago, May 5 – Arconic Inc. said it exchanged 12,958,767 shares of Alcoa Corp. common stock for $428,635,000 principal amount of Arconic debt held by Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC.

Arconic also paid cash for the remaining debt held by Citigroup and Credit Suisse: $1,961,000 principal amount of its 6½% senior notes due 2018 and $79,517,000 principal amount of its 6¾% senior notes due 2018, according to a company update.

“The completion of the debt-for-equity exchange marks Arconic’s exit of its ownership stake in Alcoa,” the company added.

Altogether, the company has reduced its total debt by about $800 million and plans to slash its debt by $1 billion in the first half of 2017.

The company announced the exchange plans on April 27 that covered 12,958,767 Alcoa shares, Arconic’s entire holding of Alcoa stock, which would then be sold by Citigroup and Credit Suisse to the public in a secondary offering.

Citigroup and Credit Suisse will be underwriters for the secondary sales of stock, which may occur in one or more transactions.

Alcoa stock closed at $36.49 on April 25.

Arconic on April 24 announced that it purchased $44,974,000 of its 6½% senior notes due 2018 and $249,999,000 of its 5.72% senior notes due 2019 from Citigroup and Credit Suisse.

Citigroup and Credit Suisse had been conducting three separate cash tender offers for Arconic’s 6½% senior notes due 2018, 6¾% senior notes due 2018 and 5.72% senior notes due 2019.

Arconic is an aluminum company based in New York.

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