Alcoa prices $2.6B in senior notes to fund South32 asset deal

Alcoa Corporation (NYSE: AA; ASX: AAI) has priced a $2.6 billion senior notes offering to help finance its acquisition of South32 Limited's (ASX: S32; LSE: S32.L; JSE: S32) bauxite, alumina, and aluminum assets, according to a company statement.

The offering consists of two tranches: $1.5 billion in 6.625% Senior Notes due 2034, to be issued by Alumina Pty Ltd, and $1.1 billion in 6.875% Senior Notes due 2036, to be issued by Alcoa Nederland Holding B.V. Both entities are wholly-owned subsidiaries of Alcoa. The notes will be guaranteed on a senior unsecured basis by Alcoa and certain of its subsidiaries.

The sale is expected to close on September 23, 2026, subject to customary closing conditions.

Alcoa said it intends to use the net proceeds, combined with cash on hand, to fund the approximately $3.1 billion cash portion of the consideration for the South32 acquisition and to pay related fees and expenses. Upon completion of the offering, Alcoa expects to terminate remaining commitments under a senior unsecured 364-day bridge term loan credit facility previously arranged in connection with the deal.

Completion of the acquisition remains subject to approval by South32 shareholders, required regulatory approvals, and other customary closing conditions.

The notes will be sold in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and to certain non-U.S. persons under Regulation S. The notes have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.

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