Alcoa Finances SpinOff With Multiple Transactions

October 31, 2016

Cleary Gottlieb was counsel to Alcoa Corporation, formerly a wholly owned subsidiary of Alcoa Inc., in a series of financing transactions in connection with Alcoa’s separation on November 1, 2016, into two stand-alone, publicly traded companies, named Alcoa Corporation and Arconic, Inc.

The financing consisted of:

  • A $1,500 million five-year senior secured revolving credit facility.
  • Offerings of $750 million aggregate principal amount of 6.75 percent senior unsecured notes due 2024 and $500 million aggregate principal amount of 7.00 percent senior unsecured notes due 2026 issued by Alcoa Nederland Holding B.V., a wholly owned subsidiary of Alcoa Corporation.

The revolving credit facility was signed on September 16, 2016, and closed upon consummation of the separation. The revolving credit facility will be used for working capital and general corporate purposes of Alcoa Corporation, Alcoa Nederland and other subsidiaries.

The notes were offered for sale in the United States pursuant to Rule 144A and outside of the United States pursuant to Regulation S. The offerings priced on September 22 and closed into escrow on September 27. The proceeds were released from escrow on October 31, and a portion of the net proceeds was used to fund the transfer of certain assets from Alcoa to Alcoa Corporation in connection with the separation.

Alcoa Corporation is a global industry leader in bauxite, alumina and aluminum products, with a strong portfolio of value-added cast and rolled products and substantial energy assets. Arconic Inc. is a global leader in multimaterials innovation, precision engineering and advanced manufacturing, strongly positioned in attractive markets such as aerospace and automotive, specialty and industrial products, and building and construction.