Alcoa Prices Offerings (AA)

Banking, finance, and taxes

Published: March 19, 2009 8:39 am

Last Updated: March 19, 2009 12:31 pm

Alcoa Inc. (NYSE:AA) has priced its offering of 150 million shares of common stock at $5.25/share. That represents a discount of about 23% to yesterday’s closing price of $5.48/share. At the same time, Alcoa has also priced $500 million in 5.25% convertible notes due in 2014.

The notes will be convertible to 155.4908 shares of common stock for every $1,000 of principal, equivalent to $6.43/share. The notes that priced come with an overallotment option of $75 million. The underwriters have an optional overallotment of 22.5 million shares.

Alcoa says it will use the proceeds, a total of about $1.3 billion, to repay its senior unsecured 364-day revolving credit facility and for general corporate purposes. The company’s credit rating has taken a beating recently, with downgrades from S&P, Moody’s, and Fitch on both long- and short-term debt.

Paul Ausick
March 19, 2009

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