Alcoa Inc., the largest U.S. aluminum producer, had its credit rating cut to one level below investment grade by Moody's Investors Service after the metal's price fell amid a global oversupply.

The long-term rating on Alcoa's $8.6 billion of debt was lowered by one step to Ba1 from Baa3, Moody's said in a statement Wednesday. The outlook is stable, indicating the rating won't be reduced again soon.

"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," Alcoa said in a separate statement.

Alcoa faces higher borrowing costs and losing bond investors who are restricted to lending to investment-grade companies. Its largest bondholders include Vanguard Group Inc., Allianz Life Insurance Co. and Loomis Sayles & Co., according to data compiled by Bloomberg.

Since 2002, New York-based Alcoa has lost its position as the world's most valuable materials company to Australia's BHP Billiton Ltd., while Rio Tinto Group and Russian and Chinese aluminum producers took a greater share of the aluminum market.

Aluminum is the third-worst performer on the UBS Bloomberg CMCI index of commodities in the past five years, with a negative return of 47 percent. Global production has exceeded demand for the past eight years, according to data compiled by Bloomberg. Growth has slowed in China, the biggest consumer of the metal.

Alcoa has responded to falling prices and the supply glut by paring costs at its least efficient plants. Earlier this month, the company said it will shut two production lines at its Baie-Comeau smelter in Quebec and postpone construction of a new line at the plant until 2019. The company said May 1 it's evaluating 460,000 metric tons, or about 11 percent, of annual smelting capacity for curtailment or permanent closure by the end of next year. Alcoa reduced smelting capacity by 13 percent in 2012 with cutbacks in Tennessee, Texas, Italy and Spain.

Chairman and Chief Executive Officer Klaus Kleinfeld is looking to add lower-cost capacity with a new 740,000-ton smelter that's part of a joint venture with Saudi Arabian Mining Co.

Alcoa is also boosting sales at its engineered- and rolled-products divisions, which sell aluminum and aluminum alloys to the automotive, aerospace and energy industries. Kleinfeld is betting that record backlogs at aircraft manufacturers replacing aging jets and carmakers using more aluminum will shift Alcoa's product mix to complex, higher-profit products.

On April 8, the company reported a 59 percent increase in first-quarter net income, exceeding analysts' expectations, after it cut $247 million in costs through productivity gains and increased sales at its engineered-products division.