Alcoa Inc. (NYSE: AA) has just lost its investment grade corporate credit rating after a downgrade from Moody’s. The aluminum giant and DJIA component is now a junk bond rating as its unsecured credit rating was cut from the lowest investment grade rating of Baa3 down to Ba1. The outlook is now Stable, implying that the downgrade is now finished.

What is interesting about the downgrade is that the company wants to mention that this is based upon macroeconomic conditions. Moody’s expects that the debt/EBITDA ratio will remain elevated in both 2013 and in 2014. The ratings agency expects relatively weak aluminum prices for the next 12 to 18 months.

Moody’s first started this review back in December of 2013. The firm confirmed Alcoa’s Ba2 preferred stock rating, but Moody’s withdrew the company’s Prime-3 commercial paper rating and assigned a Speculative Grade Liquidity Rating of SGL-1.

Alcoa responded, “While we are disappointed by Moody’s decision today, we remain committed to maintaining our investment grade rating and will continue to execute on our strategy and our 2013 goal of generating positive free cash flow. We believe Moody’s decision is a greater reflection of macroeconomic conditions and the volatility of metal prices than a true statement of the financial and operating strength of Alcoa. We have a strong balance sheet and liquidity position with limited near-term bond maturities.”

Alcoa shares are not really reacting to the news. Shares closed down 1 cent at $8.58 against a 52-week trading range of $7.90 to $9.93. The only question to ask now is whether or not the Dow Jones Industrial Average will keep Alcoa since it is a junk rating and has become irrelevant to the DJIA performance.

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