Issue of Debt
March 03 2003 - 2:00AM
UK Regulatory
RNS Number:1111I
Mitsubishi Motors Corporation
28 February 2003
To: RNS
Programme for the Issuance of Debt Instruments dated on 18th August 1994 for
Mitsubishi Motors Corporation, Mitsubishi Motors Credit of America, Inc. (MMCA)
and MMC International Finance (Netherlands) B.V. (MMCIF)
In accordance with the above captioned Programme, on behalf of MMC, we inform
you that Rating and Investment Information, Inc. (R&I) has downgraded our
Senior Long-term Bonds (5 series) from BB+ to BB.
Please see below copy of the News Release on 28th Feb. 2003, which we
received from R&I.
From: Mitsubishi Motors Corporation
Mitsubishi Motors L-T Debt: R&I Downgrades to BB
Rating and Investment Information, Inc. (R&I), has removed the following ratings
from the Rating Monitor scheme and has downgraded them as follows:
ISSUER: Mitsubishi Motors Corp. (TSE Code: 7211)
Senior Long-term Credit rating: Long-term Bonds (5 series);
R&I RATING: BB (Downgraded from BB+; Removed from the Rating Monitor scheme)
Commercial Paper Program
R&l RATING: a-3 (Affirmed; Removed from the Rating Monitor scheme)
RATIONALE:
Following the announcement on September 20, 2002 that Mitsubishi Motor Corp.
(MMC) would spin off its commercial truck and bus business, R&I placed the
company on the Rating Monitor scheme in order to verify the procedure for
succession of the company's assets and liabilities. Because the company's
competition and asset-based risks are increasing, R&I has downgraded its rating
for MMC to BB.
On January 6, 2003, MMC spun off its truck and bus business into a new company
named Mitsubishi Fuso Truck and Bus Corp, (MFTBC). The liabilities rated by R&I
remained with MMC. Through the separation of liabilities accompanying the spin-
off and a sale of part of its holdings of MFTBC shares scheduled for spring
2003, MMC plans to reduce its interest-bearing debt by 330 billion yen.
Domestically, the company is facing stiff competition from new car introductions
by the other major companies in the industry, which have a substantial edge in
terms of earning power and financial strength, and in North America the company
is under pressure to drastically improve the financial condition of its sales
finance arm, which is responsible for the critically important sales promotion
function. Although MMC is rapidly pursuing new car development and quality
control reforms through its alliance with Daimler-Chrysler Corp. (DCX), and is
undertaking risk management measures for its North America sales finance
business, careful attention to concerns over deterioration in MMC's sales
finance receivables and the severity of the market's evaluation of its used car
resale values remains warranted.
R&I is concerned that the severity of the business environment will increase
further, and when the disparity in strength between MMC and its major
competitors is considered, R&I believes that MMC's creditworthiness remains
under downward pressure. R&I will continue to carefully monitor strengthening of
alliance with DCX, and the resolution of extremely urgent management issues such
as improvement of the company's financial strength and structural reforms to its
North America sales finance business.
R&I RATINGS:
ISSUER: Mitsubishi Motors Corp. (TSE Code; 7211)
Senior Long-term Credit Rating: BB
R&I Rating; (Downgraded from BB+); Removed from the Rating Monitor scheme)
Bonds Rated Issue Sale Redemption Issue Amount (mn)
Unsec. Conv. Bonds No.1 Feb 13, 1996 Mar 31, 2003 Yen 100,000
Unsec. Str. Bonds No. 3 Dec 12, 1996 Dec 12, 2003 Yen 30,000
Unsec. Str. Bonds No. 5 May 28, 1997 May 28, 2009 Yen 30,000
Unsec. Str. Bonds No. 6 May 28, 1997 May 28, 2007 Yen 10,000
Unsec. Str. Bonds No. 7 May 28, 1997 May 28, 2004 Yen 20,000
R&I RATING: BB
(Downgraded from (BB+); Removed from the Rating Monitor scheme)
ISSUE: Domestic Commercial Paper Program
Issue Limit: 250,000 million yen
R&I CP RATING: a-3 (Affirmed: Removed from the Rating Monitor scheme)
An R&I Senior Long-term Credit Rating is an opinion regarding an issuer's
overall capacity to pay its entire financial obligations, without taking into
account the degree of recovery of specific obligations.
A Senior Long-term Credit Rating will be assigned to all issuers. Ratings for
individual issues may differ from the Senior Long-term Credit Rating depending
on the terms and conditions of the issue.
This information is provided by RNS
The company news service from the London Stock Exchange
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