NEW YORK (Standard & Poor's CreditWire) April 10, 2000--Standard
& Poor's today affirmed its ratings on Alcoa Inc., its 60%-owned
subsidiary, Alcoa of Australia Ltd., and Alumax Inc. (see list below). All
long-term ratings are removed from CreditWatch where they were placed
August 11, 1999. The rating outlook is negative.
     Ratings on Reynolds Metals Co. remain on CreditWatch with positive
implications, where they were placed August 11, 1999, following the
announcement that it had entered into a definitive merger agreement under
which Alcoa would acquire all the outstanding shares of Reynolds Metals in
a transaction valued at $4.4 billion. This transaction is currently under
regulatory review. Likewise, ratings on Cordant Technologies Inc. remain
on CreditWatch with positive implications, where they were placed March
14, 2000, following the announcement that Alcoa will acquire all
outstanding shares of Cordant in a cash transaction valued at
approximately $2.9 billion. Ratings on Reynolds and Cordant will be
equalized with that of Alcoa upon completion of their respective
transactions.
     The rating affirmation for Alcoa and its related entities reflects
Standard & Poor's belief that although Alcoa's pro forma
debt leverage would increase somewhat from previous conservative levels in
order to consummate the pending transactions, management is committed to
reducing total debt to capital to the 30% area in the near term. If both
acquisitions are completed as outlined by management, Alcoa's pro
forma debt leverage would increase to 36% from its current 28% and annual
revenues would be about $25 billion. Absent the proposed acquisition of
Reynolds, Alcoa's pro forma debt leverage would increase to 43%.
Notwithstanding the capital intensive nature of Alcoa's operations,
pro forma free cash flows are expected to continue to be more than
sufficient to enable the company to reduce debt to management's
stated goal in 2001. However, debt leverage could increase to more
aggressive levels temporarily again as the company pursues further growth
opportunities, given management's ambitious growth target of
achieving $40 billion in revenues by the end of 2004.
     Pro forma for the pending acquisitions, Alcoa's overall market
position is expected to benefit from the ability to offer a broader range
of downstream products. With Cordant, its market position in the
transportation segment would benefit from complementary castings
capabilities and increased product breadth in the high performance
fasteners and fastening systems and propulsion systems segments. As
Cordant's main business is the manufacture of industrial gas turbine
engine components and space and defense propulsion systems, the
acquisition marks Alcoa's first major venture outside its core
aluminum business. With Reynolds, Alcoa's fabricated aluminum product
mix serving the packaging and automobile sectors would be enhanced.
However, Alcoa's exposure to external aluminum sales would increase
somewhat with Reynolds, given Reynolds' comparatively greater
upstream focus. Also, certain of Reynolds' aluminum smelting capacity
has higher than industry average operating costs. Yet, the company would
benefit from certain operational synergies, particularly in procurement
and shared technological and operating expertise. Standard &
Poor's expects the combined entity will generate healthy cash flows,
with pretax interest coverage in the 9x area and funds from operations to
total debt of about 60%.
     OUTLOOK: NEGATIVE
     As management pursues its ambitious growth strategy, ratings could be
lowered if a significant acquisition causes debt leverage to increase to
more aggressive levels for an extended period. Also, concerns exist
regarding the focus of future growth, given management's demonstrated
willingness to pursue acquisitions outside its core aluminum business,
Standard & Poor's said. -- CreditWire


RATINGS AFFIRMED

Alcoa Inc.                                              Rating
   Corporate credit rating                               A+
   Short-term corporate credit rating                    A-1
   Senior unsecured debt                                 A+
   Preferred stock rating                                A-
   Bank loan rating                                      A+
   Senior unsecured shelf debt (prelim.)                 A+
   Subordinated shelf debt (prelim.)                     A
   Preferred stock shelf rating (prelim.)                A-
   Commercial paper                                      A-1

Alcoa of Australia Ltd.
   Corporate credit rating                               A+
   Short-term corporate credit rating                    A-1
   Commercial paper rating                               A-1

Alumax Inc.
   Corporate credit rating                                A+
   Senior unsecured debt                                  A+


RATINGS REMAINING ON CREDITWATCH WITH POSITIVE IMPLICATIONS

Reynolds Metals Co.                                     Rating
   Corporate credit rating                               BBB
   Short-term corporate credit rating                    A-2
   Senior unsecured debt                                 BBB
   Commercial paper                                      A-2
   Senior unsecured shelf debt (prelim.)                 BBB

Canadian Reynolds Metals Co. Ltd.
   Senior unsecured debt (gtd. by Reynolds Metals)        BBB

Cordant Technologies Inc.                               Rating
   Corporate credit rating                                BBB
   Senior unsecured debt                                  BBB
   Bank loan rating                                       BBB
   Senior unsecured shelf debt (prelim)                   BBB
   Subordinated shelf debt (prelim)                       BBB-

Howmet Corp.
   Corporate credit rating                                BBB