Moody's rates Hyundai notes Ba1

Moody's Investors Service assigned a Ba1 rating to the senior guaranteed notes due 2008 to be issued by Equus Cayman Finance Ltd. and guaranteed by Hyundai Motor Co.

Moody's said the rating reflects Hyundai's established market position in Korea, its growing global presence, particularly in North America, continuing solid operating performance, improving debt coverage measures and the positive earnings impact of its stronger model mix.

The rating also considers the foreign exchange risks associated with the company's high level of vehicle exports, the growing contingent liability related to its extended warranty program, and Moody's concerns over the company's consumer finance business, which is conducted through subsidiaries.

Over the past several years, Hyundai has posted significant sales growth, supported by strong demand in Korea and improvements in the quality and branding for Hyundai cars, especially in the US.

While Hyundai will continue to face operating challenges which may affect its operating performance - such as unpredictable foreign exchange rates and potential hikes in warranty costs - Moody's said it believes the company can maintain its solid operating performance and cash flow generation capabilities in the intermediate term.

S&P rates Hyundai notes BB+

Standard & Poor's assigned a BB+ rating to the proposed senior notes due 2008 to be issued by Hyundai Motor Co.'s special purpose company Equus Cayman Finance Ltd. The notes are guaranteed by Hyundai. The outlook is positive.

S&P said Hyundai's ratings are supported by the company's dominant position in Korea's automobile market and its ability to withstand the current downturn in the U.S. and European auto markets.

The rating also reflects potential benefits from Hyundai's alliance with DaimlerChrysler AG.

The positive outlook on the corporate rating reflects the likelihood of improvement in the credit quality of Hyundai over the next few years, backed by its combined leading position in the domestic auto market and improving brand image overseas, achieved through the introduction of higher-quality models, S&P added.

S&P lowers Preem outlook

Standard & Poor's lowered its outlook on Preem Holdings AB to negative from stable and confirmed its ratings including its senior secured debt at B.

S&P said the outlook change follows the announcement of weak second-quarter results that prevented credit measures from being in line with the current rating category.

The negative outlook reflects Preem's challenge to swiftly and significantly improve its earnings generation and financial profile to the level required for the current rating following the company's weak financial performance in the second quarter of 2003, S&P said.

Despite enjoying a relatively favorable refining environment during this period, financial performance has been negatively affected by the six weeks of planned shutdown for maintenance at the Preemraff refinery, lagging refining product prices and adverse hedging results.

EBITDA net interest coverage for the second quarter of 2003 was extremely weak, as this ratio was negative, compared with 2.9x in the corresponding period in 2002 and midcycle requirements of 3.0x at the current rating level, S&P added.

S&P confirms Britax, off watch

Standard & Poor's confirmed Britax Group plc including its €145 million 11.25% notes due 2011 at B- and removed it from CreditWatch negative. The outlook is negative.

S&P said the confirmation reflects Britax's adequate liquidity, the group's progress in improving its overall trading performance after a disappointing 2002 and expectations that the group's credit profile will not deteriorate from the current levels.

During the first half of 2003, Britax's aircraft interior systems division was affected by order deferments for seating related to the outbreak of Severe Acute Respiratory Syndrome but, given the strong demand for galleys and lavatories, Britax's trading performance has remained relatively stable, S&P noted.

The level of improvement in profitability from the group's less cyclical businesses - public safety and childcare - has, however, been slower than anticipated and has flattened the recovery of Britax's financial profile.

Public safety has suffered from depressed volumes in important segments such as in-car video equipment given the budgetary constraints on its main customer, the U.S. federal authorities. In the childcare market, difficult economic conditions have intensified sales pressure as competing lower priced product alternatives have gained share in German retail markets. Trading conditions across Britax's portfolio of businesses remain difficult and meaningful recovery in the aircraft equipment and public safety markets is unlikely in the intermediate term, S&P said.

S&P rates Shinhan Bank notes BB+

Standard & Poor's assigned a BB+ rating to Shinhan Bank's proposed $250 million junior subordinated notes forming Upper Tier II capital. Shinhan's counterparty credit rating is BBB with a stable outlook.

The two-notch differential between Shinhan's counterparty rating and the rating on the proposed notes reflects the deferability of coupon payments, the terms and conditions of the proposed subordinated notes and the overall financial status of the bank.

S&P added that Shinhan's rating reflects its relatively good asset quality and stable profitability.

Shinhan's ratio of gross problem credit (classified as precautionary or below) to total credit rose slightly to 4.15% at June 2003 from 2.91% at December 2002, but remains one of the lowest among Korea's major banks. The rating on Shinhan also takes into account its relatively stable performance since the Asian financial crisis in the late 1990s.

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