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Mercedes-Benz Financement Short-term Rating Withdrawn by S&P

20 October 1997

Mercedes-Benz Financement Short-term Rating Withdrawn by S&P

    LONDON, Oct. 20 -- 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

SOURCE  Standard & Poor's CreditWire