Mercedes-Benz Financement Short-term Rtg Withdrawn by S&P

Business Wire, Oct 20, 1997

LONDON--(BUSINESS WIRE)--Oct. 20, 1997--Standard & Poor's today withdrew its `A-1' short-term rating of Mercedes-Benz Financement (MBFi), because the rating agency no longer receives sufficient information to monitor the company.

Due to a change in its funding strategy following the acquisition of the totality of its capital by the Daimler Benz Group, MBFi no longer wishes to be rated by Standard & Poor's.

MBFi's exclusive role is to finance the sales in France of automotive manufacturer Mercedes-Benz, a 100%-owned subsidiary of Daimler Benz. In 1996, MBFi's new loans amounted to French franc (FFr) 2.4 billion, equivalent to 21% of Mercedes-Benz's sales in France in 1996.

Daimler-Benz France has been sole owner of MBFi since it acquired 50% of the latter's capital from Societe Generale in August 1996.

MBFi's rating principally reflected its ownership by Daimler Benz AG (rated single-`A'-plus/Stable/`A-1'),which offset the former's poor profitability and capital profile. In 1996, MBFi registered a FFr162 million loss due to provisions for doubtful loans and necessary restructuring. After a capital increase of FFr132 million in 1996, total core equity amounted to FFr191 million at year-end 1996, Standard & Poor's said. -- CreditWire

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