Alcoa Offers Further Details On Its Proposed Spin-Off

Shares of

were trading lower by more than 2 percent on Wednesday after the company provided an update on its proposed spin-off of its business. Alcoa announced back in September 2015 that it will split its Value-Add and Upstream businesses into 2 separate public companies by the end of 2016. Related Link:

Alcoa said on Wednesday in a regulatory filing that the new mining and smelting company will continue operating under the name Alcoa. The smelting business, to be named Arconic, will take on $1 billion in new debt. The new Alcoa will pass on a "substantial portion" of the $1 billion in new debt and the new Alcoa will also assume almost half of the pension obligations. Alcoa will assume $2.6 billion of the $5.6 billion in pension and related obligations in the business split. Arconic will also hold a stake of up to 19.9 percent in the new Alcoa. According to

Alcoa's CEO Klaus Kleinfeld said on a conference call Wednesday morning that his target is for Arconic to at least retain Alcoa's ratings which are divided between one investment-grade and two junk levels.